The Hosteller Targets 25,000 Beds as Youth Travel Market Expands as Pranav Dangi Points Out

The Hosteller is accelerating its expansion after raising ₹150 crore in Series B funding in 2026, with the capital focused primarily on new property development, technology, brand building and operational capabilities. The company aims to scale from around 6,000 beds to 25,000 beds and reach 200–250 properties within three years, targeting metros, Tier-2 and Tier-3 cities, leisure circuits and underserved destinations. Its core audience remains Gen Z and millennial travellers, solo travellers, digital nomads, remote workers and small groups, while BAM Stays is expected to contribute around 20% of the wider growth strategy by offering a more premium, experience-led proposition. The company is also developing a travel super app covering accommodation, food and beverages, experiences, mobility and community activities, with the first phase expected by the end of 2026. With experiences increasingly driving higher guest spending and repeat visits, The Hosteller is positioning its branded hostel network, technology infrastructure and community-led model as key differentiators in India’s evolving budget and experiential travel market.

The Hosteller has raised ₹150 crore in Series B funding in 2026. How will this capital be allocated across new property development, technology, brand building, customer acquisition, and operational expansion?

This round is fundamentally growth capital. The majority goes to new property development: signing, fitting out, and launching new hostels across our priority destinations, mostly through our asset-light lease and partnership models, so capital turns into beds quickly. The rest goes to brand building, developing technology, including our booking and revenue-management stack, the guest app, and the data systems behind pricing and operations, and to strengthening our talent through in-house training and a dedicated L&D module, along with the processes behind them. That is what keeps the guest experience consistent as we scale from around 6,000 beds to 25,000.

The company has set a target of reaching around 25,000 beds and has discussed a longer-term ambition of 200–250 properties. Which destinations and market segments will be the primary focus of this expansion, and what is the expected timeline for reaching these milestones?

We will grow into every metro and state capital as we change the way young India travels. We’ll also cover the key leisure circuits: Himachal and Uttarakhand, Goa, Rajasthan, Kerala, the spiritual circuit of Rishikesh and Varanasi, and many coastal towns down south.

Second, we’ll open in offbeat and underserved destinations that have a lot to offer travellers but little or no quality hospitality, and certainly no hostel experience.

Third, we’ll strengthen our presence across the 13 states where we currently operate, while entering new geographies such as the Northeast and going deeper into the southern states. Alongside this, we’ll build a stronger urban and Tier-2 presence for workations, students and budget-conscious business travellers.

By segment, our core remains Gen Z and millennial travellers, solo travellers, remote workers and digital nomads, and small groups of friends. Our ambition is to reach around 25,000 beds and 200–250 properties over the next three years, building this through phased regional clusters rather than scattered openings.

The Hosteller has expanded beyond traditional backpacker destinations into urban and emerging markets. What changes are you seeing in traveller behaviour across Tier I, Tier II and Tier III cities, and how is this influencing your location strategy?

Tier 1 cities give us consistent demand, better supply infrastructure, and customer acquisition centres, so Delhi, Mumbai, Bengaluru, Chennai, and Hyderabad stay a priority.

But the real shift is in Tier 2 and Tier 3. Domestic tourism is at an all-time high, and cities like Jaipur and Indore are turning into hubs for leisure and business travellers alike. The UDAN scheme has connected 88 cities and operationalised 618 routes, while the Union Budget 2025-26 announced an extension to 120 new destinations over the next decade.

When a Tier 3 town gets its first flight, demand arrives in a wave. Branded supply hasn’t caught up; that’s our opening.

BAM Stays represents a move towards a more premium and technology-led accommodation proposition. How does BAM fit within The Hosteller’s overall brand architecture, and what proportion of future expansion do you expect to come from this segment?

BAM is our more elevated expression of The Hosteller, created for travellers who want the community-first spirit and experiential ethos of the brand, but in a more comfortable and premium format. It allows us to expand beyond our traditional 18–32 core customer base and cater to travellers aged 30 and above, including the 40-plus segment, who are increasingly looking for slow travel, local immersion and meaningful experiences without paying luxury-hotel prices.

We see BAM as a complementary growth engine alongside the core Hosteller business, particularly in destinations where the setting itself is an important part of the experience. Over the next few years, we expect around 20% of The Hosteller’s overall growth strategy to come from the BAM Stays segment. The focus will be on selectively building the right destinations and product formats rather than pursuing scale for its own sake.

The Hosteller has reported strong revenue growth but remained loss-making in FY2025. What are the company’s key priorities for improving unit economics and moving towards sustainable profitability as the network scales?

FY2025 should be read in context. At the unit level, The Hosteller has been profitable for a long time, and our properties continue to build healthy, recurring margins year after year. What the consolidated numbers reflect is the pace of our expansion. In the last year alone, we added almost 2,000 beds to our portfolio. Alongside that, we invested heavily in technology, learning and development, and training for our people. These investments are what sit behind the consistency of our guest experience, and they show in our quality ratings and NPS.

Our focus now is on making every property and every guest more profitable as we scale. Our mature properties are already CM3-positive, meaning they are profitable after all property-level operating costs, while newer properties are reaching that point faster than earlier cohorts. With a much larger inventory base in place, our objective is to continue growing aggressively while ensuring that each new property strengthens the overall economics of the network.

The company has announced plans for a travel super app combining accommodation, food and beverage, mobility and curated experiences. What will the first phase of this platform include, and when can travellers expect to see these capabilities become operational?

Our vision for the super app is simple: a young traveller should be able to plan, book, and live their entire trip through The Hosteller, not just the night’s stay. Travel today is fragmented, with one app for the bed, another for the bike, another for the trek, and another for the café. We already operate most of these pieces on the ground, so the app brings them into a single experience.

The first phase focuses on what we already deliver across our network. Travellers can book stays, pre-order food and beverages from our in-house cafés, and discover and book curated experiences such as treks, local trails, workations, mobility options such as rentals and pickup services, and community events through a single interface. We expect the first phase to go live by the end of this year, with wider mobility integrations and partner-led inventory following in subsequent phases. We would rather launch deep in a few destinations and get the experience right than launch wide and thin.

The Hosteller has reported substantial growth in events, activities and activity-related revenue. How important are experiences and community-led programming to the company’s future revenue model, and how do you measure their impact on guest spending and repeat visits?

Experiences aren’t an add-on to the room; they’re the reason someone picks us over a cheaper hotel at the same price point. Take away the trek, the bonfire, the sunset chai session, and we’re just a bed with better design. We measure impact in a simple number: a guest who books only accommodation spends x. A guest who books the bed, the trek, the café, and the rafting trip through us spends 3-4x that. We also look at repeat stays, direct bookings, community participation, and word-of-mouth to understand whether those experiences are building a longer-term relationship with the traveller. As we add destination density and roll experiences into the super app, we see this combination of higher spend and stronger repeat behaviour as an important revenue lever, rather than looking at occupancy alone.

South India has emerged as an important expansion market for The Hosteller, with new properties and BAM Stays across destinations such as Coorg, Vagamon, and other leisure markets. What makes South India strategically important, and are there specific states or destinations where you expect particularly strong growth?

South India has an unusual concentration of Tier 2 and Tier 3 destinations, hill stations, plantation belts, backwater towns, and coastal escapes that are visually stunning and still underserved by organised, quality accommodation. That’s exactly the setup BAM Stays was built for. BAM Vagamon sits on a hilltop overlooking tea plantations with 86 beds and an infinity pool; BAM Coorg sits in the coffee capital of India. Travellers heading to Vagamon, Coorg, Wayanad or Kodaikanal want something beautiful without paying a luxury hotel rate. We expect Coorg, Vagamon, and Wayanad to keep leading growth in the region.

As The Hosteller expands rapidly, how is the company maintaining consistency in service quality, safety, cleanliness, guest experience, and brand standards across dozens of properties and multiple accommodation formats?

Consistency comes from close alignment between our on-ground teams and head office, working off the same standards for cleanliness, safety, and service, whether it’s a Hosteller dorm or a BAM retreat, with regular audits and quality checks keeping everyone aligned. Every guest review, especially the negative and neutral ones, gets studied and acted on. That’s how small fixes become standard practice: we started adding XL beds after enough 6ft-plus travellers told us the standard size didn’t work. The format changes property to property; the bar for cleanliness, safety, service and guest experience does not. That discipline has helped us maintain consistently strong guest ratings while scaling to 75+ properties.

Looking ahead to the next three to five years, how do you envision The Hosteller’s role in India’s evolving youth, experiential and budget-travel market, and what will distinguish the company from both traditional hotels and other hostel operators?

India’s young travellers are rewriting how the country travels. They want experiences over amenities, community over isolation, and flexibility over formality, all at a price that works.

Over the next three to five years, we want The Hosteller to become a trusted, mainstream choice for young India: a network of stays with a consistent standard, whether you’re in a Himalayan village or a coastal town. Compared with traditional hotels, we sell an experience, not just a room: shared spaces, curated local activities, events and a built-in community of fellow travellers, at an accessible price point. Compared with other hostel operators, our edge is scale and consistency. We have built one of India’s largest branded hostel networks, with standardised quality, safety and hygiene, a technology backbone that supports pricing and operations, and a brand that travellers recognise and return to. Our goal is to grow the category itself, turning hostels from a backpacker niche into a mainstream choice for a generation of Indian travellers.