Why are hostels getting more popular?

Hostels are getting more popular among leisure and business travelers alike. What factors are influencing this shift?

Some people see the hostel industry as becoming more organized and business focused in the past years. It’s easy to believe this as hostel-empowering technology has developed and become accessible even for small properties. Big investment companies have also made a pronounced entrance into the game, bringing along well funded marketing campaigns that pitch hostels as a solid alternative to hotels.

Popular media is quick to pick up PR stories about the “new breed” of boutique, flashpacker, luxury, or posh hostels, gaining exposure for the industry as a whole and for those properties in particular.

There may be a lot more to the growing popularity of hostels than just marketing efforts and PR though.

Hostels: More than just another cheap lodging alternative

The question is why all of a sudden have hostels become a cool place for travelers?

The shifting customer base has created a good business environment for hostels to grow and succeed. According to the 2013 and 2014 Lodging Industry Profiles reported by the American Hotel and Lodging Association, younger generations have already replaced the baby boomer generation as the most important source for both leisure and business travelers.

Back in 2012, for example, people 55 and older were the largest force of leisure travelers, just edging out the 35-54 group (39 percent vs. 38 percent). By 2013, the percentage for the 35-54 group had increased to 43 percent, while the number of the 55-plus group dropped to 32 percent. In both years, 52 percent of business travelers were aged 35-54.

As hostels tend to attract younger groups of customers, the growing number of young travelers in the market creates a higher demand for this lodging product.

So on top of big marketing dollars, press releases, and ad campaigns the popularity of hostels may also be growing on its own because the section of the market that hostels appeal to is also growing.

Another trend in the travel and tourism industry may also create positive impact on hostels — solo travel. According to The New York Times, the industry has seen a growing number of people who choose to travel on their own in recent years. Some are looking for new friends or dates during the trip. Because hostels allow travelers to easily interact with other travelers and local staff in a shared-space environment, they could be an ideal option for solo travelers.

This one may be a little more of a chicken and egg scenario. Hostels and solo travelers go together like bread and butter. But are hostels getting more popular because more people are interested in solo travel, or are more people traveling solo because hostels are getting more popular? In either case, it’s a wonderful trend.

Aside from the obvious answer of “because hostels are awesome,” what other reasons would you suggest to explain the increase in the popularity of hostels?