How Tribe changes hostel living in India

When Shantam and Aman Mehra were studying in England a decade ago, they saw that students there stayed in much better accommodation than back home. These better digs, says Aman, affected the students’ life because they gave them a superior university experience. In stark contrast, hostel living in India even today automatically translates into the decades-old format of bunk beds and common bathrooms, toilets and food areas.

After they returned, the brothers asked around and realised that this ‘black hole’ was an untapped market of customers who were willing to pay for a great service and experience – but it was unavailable. With the entrepreneurial experience of generations of Mehras – most immediately that of their father Yogesh, who has been dealing in real estate for more than 20 years – Shantam and Aman decided to fill this ‘black hole’. “We decided to dive in because we felt that the business model and market research showed us a great opportunity,” Shantam says.

Adds Yogesh: “I realised that the real estate market was set to change: appreciation would come down, so the purchase side would follow suit as people reduced their investment in it as an asset class. The trend towards rental has been growing, especially among the millennials. If I wanted to stay in this business, I had to look at these changing needs, especially at the growing demand for student housing.”

In 2019, they set up Tribe in Pune and Mumbai to take advantage of this opportunity. The journey over the past year-and-a-half was not always a smooth ride. “It has been a rollercoaster of highs and lows, as are all journeys in terms of entrepreneurship,” says Aman. “There is a mix of great upswings and times of downswings, investment-related experiences and market changes that have forced us to learn quickly and pivot where required to perfect our model so that we can provide the best experience possible to our customers.

Right in the beginning, the Mehras decided that they needed a strong team to form the backbone of their business. They made sure they took on highly-experienced professionals as part of their board and core team, who give them valuable insights and know-how into different spheres of their business. These, then, help them to take calculated decisions on how and where to grow. 

The Mehras are aiming to make Tribe a multinational firm in a few years, with a high-value proposition and unparalleled service quality. After their first two locations, they have opened one more in Mumbai and plan three more in other cities by June next year. At the same time, they are exploring various overseas options. They had intended to open Tribe Stays in Dubai and Singapore, too, by 2021-22, but the current Covid-19 pandemic has forced a postponement by another year.

The model for all future properties will be the same as so far: high-end accommodation, with two beds to a room with attached bath, priced high – at rates that start at Rs20,000 per bed per month in Pune and more than double that in Mumbai. “Ours is the most expensive student accommodation in the country,” Aman says. “We target only the top 15 per cent to 20 per cent of the student population, who attend the top universities in the cities where we operate.”

The expansion abroad will not be through the franchise route: they do not want to dilute the brand by licensing the name and giving their standard operating procedures to give a partner the right to run Tribe Stays in various places. Instead, they are identifying local partners in the hospitality business with good contacts in the areas where they want to do business, and stay hands-on. This will be a joint-venture model, with the local partner investing in the property and infrastructure and the Mehras operating it. “It will be our partner’s business, but we will be running it in our own way,” Aman explains.

The parent company in India will continue to take the decisions at every stage. For instance, the operations head is a person with years of experience in international property majors like JLL. This, the brothers add, will help them grow the business steadily – with a great team and a strong plan to achieve as much growth as possible.