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Accor Hotels and Hostels (Base Backpackers)

Hostel Trends and News

Josh started this discussion 16 years 7 months ago

Interesting reading on Accor's Web site:
http://www.accorhotels.com.au/corporate/pressdetail.aspx?id=542

Excerpt from the press release:

19 December 2007: Australia and New Zealand’s largest premium hostel network, Base, has purchased Brisbane’s most popular and well known inner city hostels - Palace Central and Palace Embassy – in addition to the popular “The Down Under Bar”, an icon of the Australian backpacker bar scene.

[...]

Operating under the auspices of the base brand, the new hostels will cement Base as the largest, privately-owned operator of quality backpacker accommodation, bars, travel outlets and job placement services in Australia and New Zealand numbering over 4100 beds, 11 bars and 34 travel outlets.

[...]

Major Investors, Private Equity Firm Ironbridge Capital and Ivany Investments, say they are “delighted with the acquisition, which further cements the Base brand as market leaders in Australasian backpacker accommodation and delivers a wealth of opportunities for travellers, staff, suppliers and business partners”. Accor Asia Pacific Hotels, who originally established Base, remain minor investors.

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santa klaus

16 years

I guess there is nothing stopping a hostel company from expanding to that extent.

I'm not sure what the relationship is between Base and Accor. I think it is a very small involvement, but they could invest more and ramp things up quickly once they are satisfied that the Base business model is working the way they want.

I guess Tim is right. Accor is way too big to be interested too much in running a chain of 10 hostels in Australia. I assume they only hold a small share in order to be able to have their "spy" in Base´s management. The guy´s mission would be to gather knowledge which could be copied into a much larger thing if they wanted to. They will not ignore the hostel market forever, probably they just think they still know too little about it.

They certainly have the means to ramp up a very large European hostel chain very quickly. Money is not the biggest problem. There are some hostel chains with enough money, but you also need people to plan these hostels, know the local legal framework, find suitable properties, oversee construction. I´m damn sure Accor has these people everywhere.

A problem they won´t solve so easily is that hostels work in a different way than hotels. If they stick to their standard procedures they will fail. They will need "hostel people" to run these hostels and incorporating "hostel people" to their corporate structures will result in some culture shocks IMHO. They won´t like each other, internal communication will break down or never happen from the start, then they will work against each other, then the whole thing will end in a mess.

I think that´s the exact reason why HI works so badly in most countries. I have witnessed more than once that either there are dumb hostel managers making a mess, or clever hostel manager not giving a sh!t about the blockheads in their national associations, which will end in a mess, too.

We have four hostels in three cities now, that´s nothing like a real "chain" so far, but I notice how things are already getting difficult sometimes. We hate hierarchies, we hate to make decisions from the head office without talking with everyone "on the ground" first. This is still do-able with only four hostels, but impossible with 100. That´s just an example. If you don´t want to get your chain stuck in mental paralysis, running 100 hostels is a very, very sophisticated job in my humble opinion. I´m really interested how they are going to solve that problem - or if they will even be aware of it!

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Josh Hostels

16 years

Base have a good product. It's not perfect, but it it's pretty good for a chain of big hostels.

I'm interested to see what the hostels down there are doing. I was thinking of flying down to Australia and New Zealand in a couple of weeks to check out hostels down there... but I booked a flight back to the USA.

(Still trying to figure out what to do for the next 10 weeks.)

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Josh Hostels

16 years

They will need "hostel people" to run these hostels and incorporating "hostel people" to their corporate structures will result in some culture shocks IMHO. They won´t like each other, internal communication will break down or never happen from the start...

I could picture friction happening between "corporate office" and "hostel staff".

Maybe a situation where "overpaid" people from a corporate office who have an attitude like "I would never stay in a shared dorm" telling underpaid hostel staff what to do. That would make the staff resent the corporate office.

I've heard that kind of complaint from some hostel staff at HI hostels.

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santa klaus

16 years

Maybe a situation where "overpaid" people from a corporate office who have an attitude like "I would never stay in a shared dorm" telling underpaid hostel staff what to do. That would make the staff resent the corporate office.

Exactly that, but that´s just a very obvious example.

I am not an overpaid corporate office crackpot - I have worked in our reception for three years, then managed a hostel for two years not too long ago.

Still, there´s loathing coming my way when I decide things. The crux is, we want people who can use their own brain, hence they hate it when someone tries to think on their behalf. The trouble is, sometimes I just have to. I have to make deals with people like Hostelworld or Bus About for all our hostels - they don´t want to bargain with 8 hostel managers of 4 hostels.

The resent is somewhat unavoidable. I want to reduce it as much as possible - that´s already much work with 4 hostels. It´s impossible with 100.

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aboriginalhostel

16 years

Well... The market between hotels and hostels are getting closer to each other year by year. Hotels are trying to expand their market towards the budget travelers and hostels are going upmarket as well. IMHO, we are still far away from each other's market, although much more closer than these segments were even 10 years ago. Hotel investors hope that these segments will merge, however there are some symptoms keep showing up which tends towards hotels (bigger demand of services, en-suite private rooms, higher budget and short term journeys, months ahead reservations), the youth travel market still has its own heritage of backpacking. :rolleyes:

Opening up 100 hostels' chain will be at least as much pain in the ass as opening up 100 hotels' chain. The question is that if you can find enough people to run it with a quality management? :D

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