There's a certain convergence under way between hostels and hotels as both often seek to attract Millennials as well as business travelers. Business travelers often see hostels as an optimum choice when hotels are booked up but many road warriors express satisfaction with the experience.
Like many successful companies, Hostelworld resolves to win by maintaining its focus on what it does best: Selling hostels. Its big challenge is to generate more awareness about the modern and socially oriented hostel while larger players like Airbnb and Booking.com suck the air out of Google.
Modern consumers will naturally move towards the ideas that best fit with the way they travel now. Hospitality brands that can keep up will reap rewards.
Hostelworld needed to automate the online booking of hostels because there just wasn't enough money in it if employees or call center agents had to handle bookings over the phone. The company gave away free software to attract owners and then came up with a business model that was midway between Expedia's prepay model and Booking.com's pay at the hotel formula.
Sure, budget travelers have Airbnb as a more affordable lodging option, but what about those who don't want to stay in someone's home? U.S. cities are largely missing out on those visitors who want something half way between a home-stay and hotel experience.
We are consistently impressed by Generator Hostels even while we despise the silly term "flashpacker."
We're interested to see how far outside the circle of 100 or so attendees this message spreads.
Knowing exactly who a hotel brand's customer is gives it the freedom to build events and an an ambiance just for them, without fear of turning off smaller demographic groups.
Generator is the leader of the design-savvy hostel market, an asset class that's become increasingly popular with sophisticated young travelers and money-conscious adults.
While we find the term 'flashpackers' to be silly, we think the trend of cleaner, better hostels to be a compelling one that will quickly catch on.