Zostel charts global expansion, in talks to bring in strategic investors

Along with a rejig of segments it operates in, the firm is eyeing ₹1,500 crore gross revenue in FY26

India’s largest chain of backpackers’ hostels Zostel is looking to bring in strategic investors as it expands its presence in India as well as global markets, including the US and Southeast Asia.

 

Zo World, the parent company of Zostel, is targeting revenues of ₹1,500 crore at gross level for 2025-26 (FY26) at a margin of 25 per cent, more than 7x of ₹200 crore it clocked in FY25, while restructuring the segments it operates in, newly appointed Chief Executive Officer (CEO) Aviral Gupta told Business Standard in an exclusive interaction.

 

“We’re in talks with private equity players outside India as well as inside. There’s interest from the Gulf as well as from the US markets. We’re just looking for the right partner to come on board from a larger long-term perspective,” he said in the virtual interaction.

 

While increasing its push into international markets, the company is consolidating its presence in four segments — Zostel, Zo House, Zo Trips and Zo Villas — to streamline operations and provide greater choice to the growing number of travellers who are now backpacking to destinations in India than before.

 

“The 100 (locations)-plus Zostel is going to expand internationally. Our first in the US with 186 beds will come up in Brooklyn, New York, in the first quarter (Q1) of 2026. Southeast Asian launches are coming up starting next month. We’re targeting 10,000 beds across all markets within the next 12-18 months — 3,500 beds from overseas and 5,000 beds within India,” he added.

 

The company’s second vertical Zo Trips, launched 18 months ago, will house curated international trips, which will be expanded to Europe and the US over the next two years. Japan was added to this segment last month, taking the existing set to more than a dozen countries.

 

The company’s third vertical will be Zo Villas, a new segment where travellers will get large villas with rentals ranging between ₹8,500 and ₹50,000 per night. Zo Villas will target families and long-stay travellers for vacation rentals, a breakaway from its core backpacker target audience, but it will also adopt a different company structure. Starting from September, with two properties, in Coorg and Pushkar, the company is targeting 300 properties by the end of 18 months, with an average of 75-80 per cent occupancy.