Backpacker hotel chain Rucksack Inn is certainly battle-hardened, having started up in 2009 during the depths of the global financial crisis but overcoming the odds to break even within 18 months.

The experience "showed us the resilience in our industry" and stands the company in good stead to cope with the current slowdown, said co-founder Samantha Chan.

Tourist arrivals here dipped nearly 2 per cent to 8.78 million in the first seven months of this year compared with last year, based on preliminary data from the Singapore Tourism Board.

Despite this, Ms Chan said business at Rucksack Inn's two outlets has not slowed.

This might be due in part to travellers downgrading from pricier hotels to cheaper accommodation, she said.

But she also notes that the hotel chain has had to constantly reinvent its offerings to attract new groups of travellers and keep guests coming back.

Ms Chan co-founded the chain with business partner Jacquelyn Chan, who is not related to her.

Rucksack Inn has branches in Hong Kong Street and Lavender Street, and is looking for a third location to replace its branch in Temple Street, which the company no longer manages.

"We don't just stick to one room type or product. For instance, we used to have huge dorms, but now we're reconfiguring to have smaller dorms because of the increased need for privacy among guests," she said.

"We used to see lots of families and backpackers, but now we're also seeing a new trend of expats looking for short-term stays and entrepreneurs from the region looking for business opportunities in Singapore.

"Our environment is conducive for networking, and we've even seen some of our guests setting up their own companies after staying with us."

The company has also set up offshoots in Malacca and Sarawak under a new brand, The Rucksack, to target the "mass affluent" in Asia.

"A backpackers hostel doesn't have to be a place just for shoestring travellers. The idea is to build a community where people can exchange ideas," said Ms Chan.