Starting on 01 February 2018 Hostelworld will raise the commission to 15% for properties that previously paid only 12%.
Back in 2014 HW raised their commissions from 10% to 12% for existing hostels. All other property types as well as any new hostels to open after that change went into effect were charged a 15% commission. With the upcoming changes those older hostels will be charged the same fees as all other properties.
This news has been received with mixed emotions from the community.
Newer hostels are relieved that the playing field has become more level. The Elevate program was particularly disturbing for them, as older hostels could afford to pay an additional 3% for page placement benefits before reaching the competition’s base rate.
Many older hostels are upset about the change because it represents a 50% increase in HW’s commissions in just four years.
In 2014 HW warned the hostel community that the 12% commission rate was only a temporary appeasement, and that eventually all properties would be charged 15%.
Below is the email from Paul Halpenny announcing the change:
I am writing to let you know in advance that we are making changes to our Standard Services and Licence Agreement which governs the relationship between you, as a hostel owner/operator, and Hostelworld Group.
Hostelworld’s vision for the Hostel industry remains firmly focused on the growth and promotion of hostels. In an increasingly competitive and blurred travel accommodation sector, Hostelworld is the only hostel focussed OTA, and the only OTA which actively invests in supporting and growing the hostel sector.
The change we are making relates to clause 4 (HW’s Service Fees), 4.1 – from 01st February 2018 your service fee will increase from 12% to 15% and a revised copy of the updated Standard Services Licence Agreement, will be issued in early January 2018.
We are continuing to invest in delivering hostel relevant products, services and major hostel marketing campaigns that no other booking provider has the interest or desire to deliver. All this will continue drive future booking growth, occupancy and an increase in new hostel customers.
We look forward to our continued partnership which is delivering the best Hostel experience for travellers.
Please do not hesitate to contact us by clicking here or by contacting your Hostelworld Account Manager directly, should you have any questions in relation to this.
Chief Revenue Officer