Hostel bookings increase 60% month-over-month as travel resumes
As India’s travel sector begins to pick up, the hostel segment is also seeing a surge ahead of the festive season due to reduced number of Covid-19 cases and higher number of double-vaccinated travellers. Youth hostels are seeing 50-60% monthly growth in occupancy and 10-20% year-on-year growth. Forward booking trends have also seen an uptick.
As Covid-19 cases surged in India in 2020, hostels were among the worst hit. However, it seems Indian hostels are slowly coming out of the woods.
MakeMyTrip, an online travel platform, has seen a significant increase in bookings for villas, homestays, vacation rentals and hostels. “These trends will continue to dominate consumer behavior for the foreseeable future and will remain for a long time even when the pandemic is behind us,” he said.
Also see: Travel Sector Rebounds as Festival Season Demand Rises
Hostel company goSTOPS is seeing a growing demand for backpacker hostels, with bookings increasing by 50-60%.
Zostel has a 200% increase in length of stay, it’s a hostel. On the other hand, Mustache Escape Hostels has already surpassed last year’s booking trends and The Hive Hostels is aiming for 100% occupancy compared to 30% last year.
As India tiptoed into the festive season, hostels are expecting better occupancy than last year. For goSTOPS, the holiday season turns out to be a blessing in disguise. It has seen a significant increase in inquiries and reservations for metros and mini-metros for nearby and passable destinations with an increase of nearly 1,000% in demand.
“From September to October, there was almost a 60% gain on a monthly basis compared to 48% from August to September. This upward trend is constant and we expect it to continue to grow, to as the industry normalizes and getaways continue to increase,” said Pallavi Agarwal, founder of goSTOPS.
For India’s largest hostel chain Zostel, T3FY21 was very similar to the upcoming Q3FY22 in terms of the Covid situation. On an annual basis, he envisions a normal growth rate of 15% at the chain level when comparing individual destinations.
Surprising increase in ARR
The festive season also brings joy to hostels in terms of Average Room Rate (ARR) corrections.
According to a recent report by Hotelivate, the Indian hotel industry recorded revenue per available room (RevPAR) of ₹1,582 in FY21, the lowest in the last 22 years. According to the hospitality consultancy, this is a drop of 60.8% from last year.
A 10-15% decline in average ARR has been recorded in the post-pandemic era due to declining bookings.
See also: The deception of rising domestic demand
“A surprising turn of events occurred when many hostels had to close shop due to the pandemic, leaving only a handful of quality hostels operational in major cities, which gave Mustache the upper hand” , said a spokesperson for Mustache Escape.
However, that seems far in the past now. goSTOPS increased its ARR sixfold over last year. The company took advantage of the Covid-19 lull to grow from 700 beds in 2019 to 2,000 beds in October 2021, recording a threefold increase in size, having taken advantage of the availability of good quality hotels in its advantage.
“While demand has increased proportionately, we are confident that RevPAB (revenue per available bed) will soon surpass pre-Covid times,” Agarwal said.
Zostel expects a 10 percent increase.