Moustache is repositioning itself from a backpacker-first brand to a structured, multi-segment hospitality platform. In an interview with FE, co-founders Abhishek Khandelwal & Deepak Agarwal discuss the rationale behind the rebrand, growth strategy, and their Rs 100-crore revenue ambition. Edited excerpts:
After nearly a decade as a backpacker hostel brand, why was this the right moment for a strategic rebrand?
Deepak Agarwal: After nearly a decade, the rebrand became a strategic necessity because the business had already evolved beyond its original identity. We began as a backpacker hostel brand in 2016, but over time expanded into mid-market hotels and boutique luxury stays. Internally, that shift was complete. Externally, however, we were still perceived primarily as a hostel company. That gap between perception and reality was becoming restrictive. At the same time, India’s travel market has matured significantly. Mid-scale hotels are driving hospitality growth, with an estimated 3 million new rooms expected to be required by 2030. The luxury hospitality segment is projected to grow at a 9.2% CAGR between 2023 and 2028, outpacing global averages.
What market signals or internal learnings made you realise the brand had outgrown its original positioning?
Abhishek Khandelwal: The clearest signal was the diversification of travel intent. Indian consumers today travel for multiple reasons—short leisure breaks, work trips, destination weddings, wellness escapes, remote work stays—and they evaluate brands differently for each purpose. On the supply side, every segment is expanding. The hostel and backpacker market in India is estimated at Rs 1,413 crore in 2024, driven by millennials, Gen Z, and solo travellers. Mid-range and luxury hotels are also growing strongly. However, luxury supply is increasing at only 5.9% CAGR compared to projected demand growth of 10.6% between FY24 and FY28.
How does the new three-tier architecture—Hostels, Select and Luxuria—simplify the brand story for travellers?
AK: The three-tier architecture provides immediate clarity. Hostels are social, community-driven spaces for solo travellers and young groups seeking connection and exploration. Select is comfort-first—designed for families, professionals and value-focused travellers who prioritise reliability without losing character. Luxuria is boutique and experiential, offering privacy, design-led spaces and immersive settings for guests seeking elevated stays. Earlier, Moustache was often seen only as a hostel brand. Now, travellers can instantly identify which format suits their travel intent. That reduces decision fatigue and strengthens trust even before booking.
What is the most important difference a guest will feel between a Moustache Select and a Luxuria property?
DA: The difference is primarily one of pace and depth. At Select, the experience is comfort-led-reliable, efficient and thoughtfully designed for ease. At Luxuria, the experience becomes more curated and immersive. It is slower, more private and emotionally layered.
Moustache is associated with backpackers. How do you plan to shift perception among mid-market and premium travellers?
AK: Our backpacker DNA remains foundational. However, many of our early hostel guests have evolved into working professionals and premium travellers-and they have upgraded with us. So, part of the perception shift is organic.
What travel trends in India are driving your move into boutique and mid-market segments?
AK: We are witnessing a clear diversification of travel behaviour. Indians are travelling more frequently, but with varying intent each time. A weekend getaway, a work trip, a celebration or a wellness retreat each requires a different format.
Mid-market hospitality has emerged as one of the strongest growth areas because it balances affordability with quality. On the premium side, demand for experience-led stays in leisure destinations is rising faster than supply.
You’re targeting Rs 100 crore in revenue by FY2027. What will be the biggest growth drivers behind that goal?
DA: The primary driver is structured scale. We have evolved into a multi-format hospitality company across hostels, mid-market hotels and boutique luxury stays. Expansion across formats will directly fuel revenue growth.