Study on factors affecting rental prices of a property with a special focus on commercial backpacker properties like zostel

Abstract

This paper intends to study the behaviour of travellers while making the choice of accommodation during backpacking trips. Every traveller has a few broad categories of accommodations to choose from, which includes hostels, budget hotels, shared homes, and luxury hotels. The hostels are considered as on the most budget-friendly and convenient mode of accommodation during trips. Traditional hostels, also known as dormitory hostels, used to be dorm style small and pocket friendly accommodations with basic amenities. However, in the recent times, hostels have redesigned themselves in more artistic ways, with luxurious amenities to attract youths. With increasing trends of visiting exotic and non-mainstream places have opened new opportunities for the hospitality industry. Since hostels provides both short as well as longer term accommodations and other facilities like wi-fi, breakfast, kitchen, and lounge etc., they are suitably placed to leverage this opportunity. In India, the culture of staying in travellers’ hostels is not that prevalent as compared to developed western European countries. While Indian customers are generally very price sensitive, which augurs well to hostels, there are a host of issues which deters broader acceptance of hostels. Our findings highlight that safety concerns in a hostel and lack of cleanliness or hygiene issues are top two reasons for travels staying away from hostels, whereas lack of privacy and noisy roommates are also issues for some of the travellers. Zostel aims to address this pain point by offering premium hostels across various locations that guarantees safety of travellers as well as clean and hygienic rooms. While Zostel’s offering have been well appreciated by those who have stayed in one of their hostels (Google Play Store ratings 4.6 star), the awareness about such a premium hostel facility remains pretty low. In this report, we have explored ways in which Zostel can increase its awareness and attract a larger share of the burgeoning travellers market. We have also tried to estimate the premium that Zostel can charge over other local hostels in their localities for its promise of superior offerings in its hostels. Finally, we acknowledge that further studies need to be conducted before final implementations of our recommendations, which include conducting this study across a broader set of demographics and looking at other considerations and consequences of introducing such changes.