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Now that Hostelworld has largely finished integrating Hostelbookers, it can turn its attention to developing features that would make it more relevant to users during their travels. None of the initiatives are exactly game-changing, but what the company is hoping is that it will make travelers more likely to click on its app rather than that of a competitor.

Budget accommodation specialist Hostelworld Group doesn’t just want to be an online travel agent. Like Airbnb and social networks, Hostelworld is doubling down on building a sense of community among its customers.

Along these lines, the company is developing a series of tools that show how it is trying to differentiate its offering to keep it ahead of others in the hostel market.

Last year, Hostelworld partnered with for its MyTrips local recommendation platform and the product has now been expanded to include a noticeboard function, which allows users to find out what is going on at places they are staying. More recently it added Speak the World, which offers a translation service powered by Google.

“We have launched a number of features that are partly related to building the community, partly related to differentiating our offering, because we’re launching functionality that is very relevant to our target audience that generalist OTAs [online travel agencies] are unlikely to offer,” Chief Executive Feargal Mooney said in a telephone interview.

The next phase of development, allowing guests to communicate with one another pre-trip, will begin testing later this year, he said.

“We’ll become much more than just a booking platform. We’ll become effectively the [hostel] noticeboard in the pocket and give our customers reasons to download our app at the beginning of their trip and to engage users throughour their trip because what we are seeing is our customers are increasingly booking night by night as they travel,” Mooney said

Mooney acknowledged that both Expedia and could easily build this type of functionality if they wanted to but probably wouldn’t because of their wider audiences.

“I think a lot of the things we’re doing or are focused on are things that absolutely Expedia could do, could do, but they’re the sort of things that are probably unlikely to be relevant to 99 percent of their customer audience,” he said.

Updating Payment Options

Attempting to interact more with users is practical next step for a company that has spent most of the last few years working through the integration of its largest competitor, Hostelbookers.

Hostelworld is now finding the time to also work on developing new payment options for customers, which will also likely please hostel owners.

Customers still have to pay a deposit to secure their stay and then pay the remainder of the balance at the hostel, but Hostelworld plans to soon expand its recent rollout of non- refundable rates.

“What this means is that a hostel can have a particular bed or a private room for sale at two different price points depending on the model and if somebody is prepared to commit [to] a non-refundable rate then the hostel would typically offer 10 percent discount. So there’s a benefit to the customer — a 10 percent discount for a non-refundable rate — and the way that operates then is we continue to take our piece of it as we do with the deposit but it means that the hostels can charge their piece straight away rather than waiting for the arrival date,” Mooney said.

First-Half Results

Hostelworld Group’s results for the first half of its current financial year were an improvement on its 2016 numbers. Net revenue increased by 16 percent to $54.9 million (€46.6 million) and it swung from a pre-tax loss of $6.5 million (€5.5 million) to a profit of $6.1 million (€5.2 million).

“The group has returned to growth, reflecting the strength of the core Hostelworld brand, which now represents 92 percent of total group bookings and the success of our continuing product, marketing and operational initiatives. The strong trading seen in the second half of 2016 continued throughout the early months of 2017, with growth in bookings across all geographies,” Mooney said in the company’s stock market update.

Meanwhile, the company also announced the appointment of HomeAway co-founder Carl Shepherd as a non-executive director. Shepherd left HomeAway in 2015.

“Part of the HomeAway business was built through acquisitions… I think they did about 30 acquisitions of smaller businesses all round the world. What that means is that Carl understands online travel businesses, he understands the difference in online travel businesses in Asia versus Europe versus North America,” Mooney said.


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Tags: hostels, hostelworld, otas

Photo credit: Actor Charlie Sheen appears in one of Hostelworld's commercials. The company wants to make itself indispensable to its users when they are traveling. Hostelworld Group

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