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NAME: Rahul chiparia

Roll no. 170604008

Case study: Backpacker’s Hostel

QUESTION 1. What should the CEO of zostel do to sustain the advantage gained
by zostel?
Answer. the most important advantage of zostel is that if provide better services at
low-cost which is affordable and it more connected with its customers by fulfil the
travelling desire of travelers. such as traveler like to interact with each other and
zostel provide this service. Unlike other company are not good at every aspect if
their price is low but provide less facilities and in order to maintain
the same path by zostel should do the following step.
1. Brand building: Brand building is basically positioning the product and
service inside the mind of the customers .so if through the service they
provide can make a god image for their company and advertisement is
very big tool in this process.
2. Gross selling: gross selling is sell the one product with another one so
zostel basis aim is gross selling in which zostel won a homogeneous
services in all its hotels in different cities
3. Innovation in zostel: in the order to complete with competitors zostel must
provide competition price & facilities and the same time to remain
profitable zostel need to come up with more innovative idea and should
strengthen their business

QUESTION 2. Should zostel enter into joint venture or acquisition?

Answer. yes, zostel should have entered into joint venture or acquisition. This
point is supported by the following: -
• Expansion plan: as zostel need more capital for their expansion plans. if they
want to expand their business domestically, they need more properties. So,
this problem can be solved through joint venture with other hotels
companies whose brand name is good between people. On the other hand, if
zostel want expand their business internationally then zostel need to study
the culture of the other country. So, if they join with local company of
international business it must be very help full for them to understand the
culture and this also help in capital acquisition.
• Requirement of fund: lack of fund is big problem for any new start-up. So,
in the other to fulfill the fund requirement joint venture and acquisition is
best option.
• Brand establishment: if zostel work with other hostel company then it can
help zostel to introduce them into market and in future they set benefits of
zostel to introduce them.

QUESTION 3. Why has zostel been successful and what are the aspects for future
Answers. The success of zostel is depended on the following: -
a) Competitive advantage: zastel competitive advantage was that it provides
low cost affordable accommodation, which is hygiene and provide basis
amenities like wi-fi and an creation of a youthful ambience and exciting
engagement activities. On the other hand, other hotels like lodges and
guesthouse,1to3 star hotels, government YHAI hotels and standalone small
hotels and provide low cost affordable accommodation but failed to
provide basic facilities and were located in obscure location.
b) Good management & fund and strategies for business: zostel followed a
franchise model with all its properties rented out. It allowed the local
personal to invest in properties & personally take care of marketing and
branding. Change 15% commission on booking made through its app plus
a monthly booking fee.
c) Innovative ideas: as most of the backpackers travelling would love to get a
feel of the cities they stay in therefore, zostel decided to get the
backpackers inside the hotel itself, by themed the ambience on the city
they were in and this approach gristly exchange the experience of the
d) Branding: “by the youth, for the youth, and of the youth” this the tagline of
the hotels in their brand building for this they do following activities: -
i. Youthful portrayal of the company.
ii. Partnership.
iii. Zostel internship
For future aspect of success of zostel must consider following points:
• People perception: the perception of people about cheap accommodation is
not good and they are considered unsafe, unreliable and not so comfortable
zostel need to break this misconception in order to gain popularity by using
popular marketing strategies.
• Management: zostel need a proper management of the operation so that they
can grow, because they do their business by joining with other individual
hotels whose management is not so good and zostel face the problem to
interact and convey their policy to individuals.
Resources: they need to find a right property at a right location and convert it to
zostel by providing all the necessary facilities that can make a person stay

QUESTION 4. Analyze the competition scenario of zostel.

Answer: zostel was facing competition from various market players life OYO
rooms, Stay Lilla etc. all these players were trying to capture the market by
providing letter amnion at the best rate possible. All this player had very huge
potential to slash zostel market share and profitability.
How zostel come out through this competition: -
If we look at low -cost affordable accommodation the main player prior to zostel
entry were lodges and guesthouses were very affordable but they. locked even the
basis facilities and were located in assure location these problems are solved by the
zostel with main objective to provide, affordability, hygiene and facilities with
security insurance. Zostel rooms were affordable and at some time hygiene and