“Money is flowing into the hostels market and established hotel companies want a piece. Will this new corporatization cost hostels the soul of their original mission?” — Patrick Whyte, Skift
The Big-Money Reinvention of the Humble Hostel: A Skift Deep Dive
Zooming out and looking at the hostel market as a whole, it’s easy to see why the money is starting to flow in. Most properties are unbranded and the small chains that have popped up in Europe, Asia, and North America are still small scale. Then there’s the hostel model itself with its multi-bed dorms and flexible layouts, making it extremely cost effective. And finally, the people using hostels, the under 35s are spending more money doing things, including traveling.
The irony is that for everything hostels have given the wider travel and hospitality industry none of these new entrants want to be known as a hostel.
Reactions to hotels moving in on “our” hostel territory vary widely from established hostel operators.
Some respond with an indifferent shrug of the shoulders, maybe because they think a hotel will never have the soul of a hostel. Or maybe they think we have had it coming since hostels started offering more private rooms and moving in on the hotel’s traditional market. Or maybe they’re in a market that isn’t affected by this change yet.
Other hostel operators feel threatened by these corporations with deep pockets and all the resources that a mom & pop backpackers hostel just can’t touch. Maybe they’re concerned about how the market will change and how they will need to change their own businesses in response. Maybe they have already seen their demand dry up, or watched price wars flare up in response to new competition.
Many are happy to see some positive media coverage of hostels in general, even if the press does enjoy tossing the old school backpacker hostels under the bus while brag about how pretty a new boutique hotel made a dorm.
I’m curious to know what the future hostel owners in this forum think. You guys don’t have to adapt an established business to respond to new competition. You get to start fresh. You’re coming in with a clear idea of today’s market, including the hotels. Presumably you have an idea about how you intend to fit into it and thrive with your new hostel. What’s YOUR opinion on hotels adopting the hostel model? What kind of standards will YOUR hostel have, and how do you plan to compete in a market with big corporate competitors?