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Hostels have outperformed the hotel industry in recession-hit Europe where wealthier travelers turn to hostels for the mix of common areas, a social atmosphere, and private rooms for cheap.
Many hostels still carry the image of run-down properties, with only young backpackers on very limited budgets as guests. However, the European hostel concept has today become trendy and modern with extensive public areas and central locations, appealing to a much broader clientele both in terms of age and purpose of traveling.
They are one of the only accommodation options for the youth segment, but operators can just as easily meet demand from couples with the introduction of private rooms. Private rooms also cater to less price-sensitive guests (e.g. business guests) who are looking for an accommodation offering a thriving social environment. Finally, the modern and trendy product fits the requirements of an older clientele, including flashpackers, who seek attractive public areas and the possibility to participate in fun events.