Zostel

Zostel is a hostel chain with over 95 locations across India and Nepal

History

Zostel Hospitality Pvt. Ltd was established in August 2013 by seven co-founders, who initiated their venture with the launch of the first Zostel in Jodhpur, Rajasthan on 15 August 2013.

ZO Rooms

In November 2014, the founders launched a new project called ZO Rooms, which aimed to provide budget-friendly hotel accommodations and aggregate hotel rooms. There were reports that ZO Rooms was acquired by rival OYO Rooms, in an all-stock deal in December 2015, which was later denied by OYO.

Zostel offers various accommodation options such as dormitories and private rooms.

ZO World

In 2025, on its 12th anniversary, Zostel announced the launch of “Zo World,” a travel-tech platform extending beyond hostel operations. Zo World includes several parts:

• Zo Trips, a travel planning service that covers flights and local activities, with a projected annual revenue of ₹1,500 crore
• Zo Villas, a network of around 300 vacation homes
• Zo Houses, co-living accommodations aimed at digital nomads and creators
• Zo Digital, an artificial intelligence system designed to provide rewards and community engagement features.

Business Structure and Financials

Zostel operates through a franchisee-owned, franchisee-operated (FOFO) model, where individual franchisees own and manage each property according to the company’s guidelines. The company charges a commission of 21–30% on booking and food and beverage revenue from its franchisees, and provides operational support and guidance. According to reports, Zostel records annual accommodation bookings of about ₹166 crore (approximately US$20 million), with an estimated year-on-year growth of 40–50%. The strategy of the company is to focus on smaller urban areas across India, including Tier-II, Tier-III, and Tier-IV cities, rather than concentrating only on major tourist hubs.

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