We're Planning To Expand Our Footprints In Nepal & Sri Lanka By FY 2023: Pankaj Parwanda, Co-Founder, goSTOPS
As a youth focused brand, we want to be present across any locations that they will appreciate a quality hostel experience, without compromising on the safety and convenience aspects that they have come to expect from goSTOPS.
What is the story behind the inception of goSTOPS?
Pallavi founded goSTOPS, and I joined as the co-founder later. Both of us are avid travellers and love exploring new destinations – so it was simple for us to work together towards building Pallavi’s vision for goSTOPS. The idea was incepted by Pallavi during one of our trips to Europe in 2012. The conveniences offered by the backpacker hostels there, got us wishing to have similar avenues back home, as well. We couldn’t find any good options here when we started searching for some, and that was the driving force for us to introduce the concept in India and help other backpackers and travel enthusiasts like us.
We opened our first hostel in Varanasi. Initially, our bookings came from European backpackers and they really helped us get off to a running start in the early days. goSTOPS essentially caters to the youth – typically millennials and Gen Z travelers. In 2014, we started actively targeting the Indian audience through domestic distribution channels and they loved it. Over the next few years, our customer base continued to expand and we grew larger and stronger in the market. In FY 2020-21, we raised a round of funding led by 1Crowd and other angel investors including Mr. Nitish Mittersain, the founder of Nazara Games. We have been scaling our operations ever since, managing to raise a fresh round of capital infusion almost every 6 months. We too faced the adverse effects of the spreading pandemic and lockdown blues that significantly affected the travel industry. However, we not only survived, but even managed to grow in the period – increasing our presence from 8 hostels to 28 properties across 27 sought-after locations in India.
With things opening up, which location is likely to be the preferred destination for the youth in the coming vacation season?
In the travel industry, the festive season generates a lot of demand for leisure destinations. Typically, leisure destinations that are within an 8-hour driving distance from metro cities, attract more visitors. Earlier, proximity to a metro city governed the operations for the hospitality service providers. More recently, for the youth, the novelty of a destination is more attractive. They are happy and willing to travel 12 to 15 hours away from their place of work. Destinations like Manali and McLeodganj, which are a half day’s drive from Delhi, are now considered a normal weekend trip as opposed to being treated like a journey for a long weekend.
After being stalled for over 18 months, with corporates now re-opening offices and business getting back to normal, revenues from properties in destinations like Delhi, Mumbai, Bengaluru and Chennai have also started recovering and are doing well now. In addition, destinations within 12-15 hours of travel from Delhi, Mumbai, Bangalore and Chennai are also going to see a lot of footfalls. Because of the winter season, and the declining air quality in some cities we are experiencing a lot of bookings at our properties in Himachal Pradesh, Uttarakhand and Rajasthan. We predict that overall, destinations in North and Western India will experience the most traffic, followed by South India.
What are some of the current trends in the travel industry?
We have noticed quite a few new and emerging trends in the travel industry recently. Solo travel is quickly picking up steam, as it provides a plug-&-play social setup for travellers to engage. Individuals weary of the monotony of being cooped up at home during the enforced lockdown and travel restrictions, are engaging in a phenomenon known as ‘revenge travel’, and seeking some much-needed personal time, by preferring to travel alone.
Another growth area is the increase in the number of women travellers – both solo and with friends. Earlier, the percentage of this demographic of travellers was very low and muted. These days, with the availability of branded accommodation options, including hostels – most women are comfortable travelling by themselves and staying alone as they feel safer in this social setting.
Pet friendly vacations are another new area of growth. There is a growing segment of our population who prefer to have their pets accompany them on their get-aways and are constantly looking for accommodations that cater to their needs and requirements.
What are the basic demands of GenZ from a hotel or hostel?
Travellers typically expect the basics to be taken care of, like ensuring proper hygiene and cleanliness, quality infrastructure, 24-hour electricity backup, hot water and air conditioning etc. But the pandemic has also given rise to new requirements, and we too are adapting to the resulting changing expectations.
GenZ travellers today expect hostels to have a great vibe and interesting people. In addition, to the hostels being sanitized and sterile, it should offer experiences for the guests to make excursions to the destination. This has translated to the need for a more vibrant, diverse, and experience driven designated areas of networking and chilling. For instance, because a lot of travellers are now exploring work-ations they need a calm, and a peaceful environment to work. At the same time, within the vicinity they need places to relax, and indulge in leisure activities that also connects them to like-minded people.
A few expectations have solidified post-covid, for example, Wi-fi connectivity. Guests expect the accommodations to provide reliable, high-speed internet/wi-fi connectivity all the time, and are even willing to pay a premium for this, as a lot of millennials and GenZ travellers are taking ‘workcations’ – so a good connection is the need of the hour.
Tell us about your further expansion plans?
We envision goSTOPS as a youth focussed brand, and as such we want to be present across all the destinations that the Indian youth travels to. With young travellers – particularly the GenZs, thronging to leisure and off-beat destinations, hostel brands are best poised to be able to set up fast and make the most of the demand. By March 2022, we have plans to add 60 hostels to our existing portfolio of 28 properties. By 2024, we plan to expand internationally and have a presence in exotic locations across Nepal, Sri Lanka, and Southeast Asia. By 2027, our goal is to add 75,000 beds and achieve a revenue milestone of 1500 crores.
Given that most of our guests are used to a mobile-first approach, we are also in the process of building a mobile app that will help then connect with us immediately and more easily. This will also help us widen our reach and target audience, while improving user experiences before, during and even after their stay with us.
What is the current situation of the hospitality industry in India? How is it looking at the festive/winter season?
The demand for quality and affordable accommodations, recovered very quickly, after the second wave. It took us nearly 8 months after the first wave in 2020, to reach close to our pre-Covid numbers. We had reopened our properties, and reached 84.85% of our pre-pandemic volumes by March 2021. There was a slight dip around May this year, but by July 2021 we had achieved 125% of our pre-Covid numbers.
The hospitality industry is going to see a sharp increase in travel this year. There is a lot more confidence that it is safer to travel now, with a majority of the population having been successfully vaccinated. This is already evident in the way that guests are making bookings for the festive season.
What other products, properties, and locations are you considering for the next launch? And, what are your expectations from this launch?
Owing to the upcoming winter vacations, we expect a spate of travel bookings in the next 2 months. Based on the interest and data from visitors on our platform, we are focusing on expanding our presence across new destinations, and are actively scouting for accommodations in Lonavala, Panchgani, Alibaug and are increasing the capacity at existing destinations like McLeodganj. We are also looking forward to shortly start operations in Dehradun, and Bengaluru within the next 3 months. By March 2022, we are aiming to add 3000 new beds at different locations across the country.
We recently launched goEXPERIENCES, a new vertical focused on the Gen-Z and millenials to provide an array of exciting experiences and adventures across various popular destinations in India. The experiences are curated by goSTOPS’s trekking and travel experts. goEXPERIENCES also offers live booking and we distribute them across all channels - website, app, IVR, OTAs.
What revenue are you expecting in the next few months?
Revenue recovery is on an upward track, as we achieved INR 1.25 crores in October and expect to close at INR 8 cr, by the end of the year. We have a new property in Goa which is operational now, and are expecting Bengaluru and Dehradun properties to be operational within the next 2 months.
Apart from these, we are actively scouting for properties in Lonavala, Panchgani and Alibaug. We are ramping up our capacity in popular destinations like McLeodganj as well. So far, we have grown about 2x, increasing from 1000 to 2000 beds and by March 2022, we will add about 3000 new beds to this number. So the next quarter is going to see us ramping up our capacity across different destinations, and we will be in a strong position to hit our estimated numbers.
What are your funding plans?
We recently raised $1 Million from IAN (Indian Angel Network) in April 2021, and are in the process of closing another round for a further infusion of $1 million soon. This will be a bridge round, funding wise, as we expected the funds from the previous round to last a while longer, till atleast June 2022. However, the pandemic also presented us with a few opportunities which we decided to strategically capitalize on, resulting in us achieving our year end targets, like increasing our capacity to 2000 beds, well before time – by August 2021. This led to us needing to utilize the capital faster than we planned for, but this puts us in a stronger position operationally and will help us achieve bigger, more ambitious targets. This has led to us also starting to work towards our Series A funding targeting USD $8-10 Mn, that we aim to close in December.
When can we expect goSTOPS in Nepal and Sri Lanka?
Apart from India, the youth of the country also show a lot of interest in travelling to Nepal and Sri Lanka. As a youth focused brand, we want to be present across any locations that they will appreciate a quality hostel experience, without compromising on the safety and convenience aspects that they have come to expect from goSTOPS. As a part of our expansion roadmap, we plan to go international soon and have properties in Nepal & Sri Lanka by FY 2023 and this will soon be followed by a push into South East Asia as well.
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