What Got this Messiah of Budget Travelers into Entrepreneur India's 35under35
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Blenders Pride Reserve Collection presents Entrepreneur’s 35U35 list included some path-breaking names from the field of entrepreneurship and Akhil Malik made it to the coveted list!
Akhil Malik, the first generation entrepreneur who built India’s topmost social accommodation concept targeted at millennial travelers as the co-founder of Zostel Hospitality belongs to a salaried middle-class family. His education at IIM Calcutta gave fuel to his entrepreneurial spirit and led to the birth of Zostel. While he isn’t a majority shareholder in the business, which is part-owned by Institutional Investors and Malik’s fellow co-founders, the business is more than just dear to him.
His biggest inspiration has been that of being a traveler. Amid the many challenges he faced firsthand whenever he ventured out, traveling on a budget was his biggest issue.
“One was always supposed to stay in random, dingy guesthouses or budget hotels and we always looked to get out of there quickly after spending the night. We always wondered if we could make ‘stay’ a part of the overall travel experience for budget travelers and when we saw and experienced travelers’ hostels outside India in Europe– we immediately knew this was what we were lacking in India and hence Zostel was born,” Malik recounts.
He takes pride in Zostel checking all boxes w.r.t. basics of hospitality such as security, hygiene and affordability. He says Zostel provides a vibrant, youthful community of like-minded travelers whom you get to meet while staying at the accommodation.
The company’s select locations, as well as the quirky design elements, are meant to facilitate travelers from various walks of life and geographies to come together, have fun, make new friends and share their travel stories – adding the social element that is missing in any other hospitality concept at the moment.
On a daily basis, approximately 1000 travelers stay in 33 Zostelsacross India and Nepal. Till date, over 5 lakh guests have stayed at a Zostelwith a rough split of 60 per cent Indians and 40 per cent foreign visitors.
Zostel, on a company level, has raised more than $15 million so far but that was primarily for its hotel sub-brand ZO Rooms way back in 2015. The hostels business, which is the only operational business since the last 3 years is overall profitable and growing organically at 60 per cent year on year. However, to grow faster and to be able to execute some new exciting projects in adjacent domains, Zostel is currently looking to raise a small round of funding says Malik.
Looking back, winning 13 B-Plan competitions way back to back in 2013-14 including biggies such as Wharton India Economic Forum and Richard Ivey Canada was a major confidence booster to start with for Zostel founders, 6 of them in total.
With a strong brand following and more than 30,000 reviews online out of which 80 per cent are 5-star and 15 per cent 4-star, Malik gets his daily dose of motivation to getup every morning and be excited to tackle new problems heads-on.
“Being written off by the market in 2016 and then silent working under the radar for 3 years without any money to emerge as Asia’s biggest hostel chain has been a great achievement for me and my team,” says Malik.
Entrepreneurship comes at its own cost. At Zostel, the cost Malik has had to pay is that of working without salary for a long time despite hefty education loan and family responsibilities. Dirty tricks by rivals to stifle competition, downscaling a 600-member strong team to 15 people and relocating more than 500 employees to other companies after ZO Rooms was created has also been daunting.
2018 though turned out to be a great year. 2018 has been a great year – an year in which we broke even and launched into promising adjacent verticals while strongly expanding our core hostel business. As a brand, we are more confident than ever before in our ability to guarantee quality stay experience to travelers and generate handsome financial returns for our partners. The road ahead looks great and the team’s motivation is high.
Has the company attained break-even? What does the road to profitability look like?
- As explained earlier, we have attained break-even in 2018. We should be making profit in the nest financial year but considering the promising opportunities of growth left and right, we would like invest that back into the business.
What’s your next trigger of growth?
- We are very bullish on our current millennial accommodation market. Major hospitality brands are now taking notice and launching their own youth-focused sub-brands – Jo & Joe (Accor), Moxy (Marriott), Tru (Hilton) etc being the cases in point. Alternate Accommodation is another area which we are looking at very seriously in 2019. We have recently launched ZostelX –our alternate accommodation sub-brand wherein we are offering homestays, farmstays, chalets, tree-houses etc to the travelers in offbeat locations in the country. We are banking on our unique, tried and testedZostel-local collaboration model to work in this segment too so as to take tourism to deeper corners of the country in a responsible manner.