Skift Take

Across the United States, hostel markets are growing. With new locations popping up in major cities like Miami and Chicago, it’s time to take a look at what’s holding New York City back.

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The global youth travel sector is expected to increase to $320 billion annually by 2020 and is looking for a different kind of experience. These travelers are looking to share their adventures, and travel more often for longer periods of time. They thrive on social travel, and hostels are at the helm of this movement, providing travelers with the opportunity to try new things and share unforgettable social experiences with other like-minded international travelers. However, of all the cities welcoming these young travelers ages 18-34, one major city is missing out on the action.

The Rise of Hosteling In The US
Hosteling has become a fast-growing component of the alternative accommodations segment in the US. In the last five years alone, hostel markets have grown nationwide with new locations popping up in major cities like Miami and Chicago—both of which added over 200,000 annual hostel bed nights. Even trendy European hostel brands like Generator have responded to the growing US demand with a new Miami location slated for 2017. Companies such as AccorHotels—Europe’s largest hotel brand—are even launching lines of hostels to tap into this social travel market.

Although the United States has increasingly become a destination for hosteling, it’s largest tourism market, New York City, has been largely closed off to this rising population of travelers. Without a proper regulatory and licensing system in place for hostels, many investors and hostel owners are unable to invest in New York.

A Lost Opportunity
The lack of a proper regulatory and licensing framework for hostels has deterred many investors, both domestic and foreign, from constructing and operating hostels in New York City. Because of that, the hospitality industry has suffered. Based on an analysis of the hostel market in 2015, it’s estimated that New York City generated only one third of the revenue that it could have for a city of its size (estimated London hostel annual market value of $669 million compared to NYC’s hostel market value $234 million). Not only has the city lost out on tourism revenue, but it has shut out the youth travel demographic that hostels attract—a population that constitutes more than 20 percent of the global travel population.

In addition, NYC tourism is missing out on the critical diversity that hostels can provide. The majority of hostels are independently-owned small businesses. With only eight percent of worldwide hostel properties being owned by chains, hostels would inject a variety of accommodation that would not only help drive down room costs, but also bring new travelers to the city.

Looking Forward
Although the climate for hostels in New York has been a hostile one, that could change in 2017. The New York City Council is currently considering a new bill that would introduce a licensing and operations scheme for hostels. Although it has been under consideration for four years, it has not gained the traction needed to bring it to a vote.

This legislation would create a safe, affordable and regulated hostel industry, providing countless benefits to the city. It’s time for New York to truly open its doors to the international hosteling community. Today, with all the uncertainty around travel, welcoming the youth travel demographic would bring a much needed diversity to the US’s greatest melting pot. It’s time we rallied behind this bill and pushed the NYC legislature to support hostels in New York City.

To learn more about the bill, click here.

By Feargal Mooney, CEO, Hostelworld


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Tags: alternative accommodations, hostel, hostels, hostelworld

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