ZO Rooms has a room ‘available’ for every traveller

At a time when the hospitality industry is seeing new online hotel aggregator entrants that are largely focusing on providing standard affordable stay to any traveler, ZO Rooms is in efforts to cater to various segment of travelers in the country differently based on their specific needs and demands.

For backpackers and leisure travelers, there is Zostel (dorm facility) and ZO homes (bed and breakfast facility); for those traveling with family, they have ZO rooms (budget hotels)/ ZO prime (premium 3 star category)/ ZO star (4-star accommodation) depending on the quality of services customers want and the money they are ready to shell out. Then there is what’s called ZO apartments, largely for corporate travelers who stay for longer duration and want their private space for meetings.

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While their properties Zostel and ZO homes are fresh and new youth-targeted services aimed at breaking the norms of leisure traveling in India, at the same time it’s clear that with ZO Room’s 1,000 properties spread across 50 cities in India already, they are playing it smart. They do not want to lose out on organizing the fragmented market for the traditional, family and corporate traveler.

“A Zostel caters to backpackers, not corporate or family travelers. These segments want different set of services from what a backpacker would want. So it is essential for us to provide clear and distinguished value proposition for different customers,” says Dharamveer Singh Chauhan, CEO and co-founder, ZO Rooms.

Focused on building these diverse properties, Dharamveer says, the company wants to penetrate everywhere in the country. Currently, ZO Rooms has expanded its network to 11,000 rooms in 1,000 hotels across 50 cities and towns in India. It is targeting 5,000 hotels and 50,000 rooms in the next six months. Where is all the money coming from?

For a startup to be able to foray into newer sectors requires backing, and ZO Rooms flaunts of having New York-based investment firm Tiger Global Management and venture capital firm Orios Venture Partners behind them. It is reportedly looking to raise $200 million that will help it in raising capital, but Dharamveer refused to confirm the news or comment on it for now.

He, however, said that his company has been lucky in attracting investors from the college days when they raised their first round of funding for Zostels. “Ever since, we have got several offers in our journey. We have decided to go ahead with those who share our vision, have relevant experience and understanding of the ecosystem,” Dharamveer said. He feels if startups have a great team and their business is scalable, attracting funds won't be a problem.

At ZO Rooms, meanwhile, efforts are on to upgrade customer services. “You cannot always expect discounts and cashback offers to get more people to stay at your hotels, a method that our competitors have increasingly resorted to. There needs to be real value for customers to opt for you over others. This is why our hotel partners are much more than somebody we are merely giving bookings to. We give them training, provide them with technology support, infrastructure upgradation, vendor collaboration and most importantly, a feedback mechanism system so that customer concerns can be learnt on an ongoing basis and rectified at the earliest,” says Dharamveer.

In this regard, the company also has what it calls ‘ZO advantage program’ using which the hotel staff at different properties are being trained daily via videos.

Also, ZO Rooms has partnered with Ola, Uber and Zomato in a bid to make the stay experience for customers more seamless. Another crucial area for hotel budget aggregators in enhancing its services is ensuring security. Even as this can prove to be very challenging as they don't own the properties, yet it is imperative to ensure a secure stay for travelers at the same time. ZO Rooms says it has a decent security mechanism in place. Verification is done on every front from customers to hotel partners. Insurances and due licenses are also taken care of by them when they are partnering with hotels.

Interestingly, ZO homes, not everyone is entertained. As a security measure, only people who have already stayed at ZO Rooms at least five times are allowed to use the ZO homes category. Also as a concept, this bed and breakfast facility is a western concept just like backpackers. "It’s a fragmented sector," agrees Dharamveer. He feels it will take another five years for bed and breakfast services to emerge in India because trust and security are key essentials here.

As for other ZO properties, the company's aim is to let people travel unplanned with a free mind.

"Wherever travelers go, they just have to open their apps and easily find ZO properties in the vicinity that match their requirements. That’s the kind of services and level of trust we want to build with our customers. While redefining traveling experience, we are also providing a simple, seamless process of finding, booking and staying at the best customized accommodations for everyone, everywhere,” concludes Dharamveer.