The short answer: well, no. But they’re certainly changing.
In a sign that signifies changes in the hostel industry, Skift reported this week that Generator are dropping the ‘hostels’ part of their name.
This subtle rebrand is an attempt to appeal to travellers on both sides of the pond as Generator expands from their European stronghold into the US market this month with their new opening in Miami.
But while this might seem like a drastic move from the brand, it’s a result of changes that we have already seen happening in the industry.
Here are some of our key quotes to illustrate these changes from Skift’s interview with Generator CEO Alastair Thomann and Chief Marketing Officer Jason Rieff…
ON THE BLURRING LINES BETWEEN HOSTELS & HOTELS:
“Our industry, in general, what we used to call the hostel industry, in terms of the luxury hostel, is moving more and more toward boutique hotels. And you’re finding boutique hotels adding dorm rooms; they’re moving toward the hostel model. It’s more about the social spaces and the community.” – Thomann
The evolution of the traditional hostel into various forms – from poshtels to eco-lodges to design-led chains like Generator themselves – is nothing new. However, guest demand continues to blur the lines between boutique hotels and hostels who find themselves appealing to the same guest demographics. This is largely due to the huge improvements in quality made across the hostel sector over the past decade as well as the importance of social spaces to modern travellers. As these sectors continue to merge, it will be interesting to see if hotels are able to authentically recreate the hostel experience.
ON HOSTELS APPEALING TO DIFFERENT TYPES OF TRAVELLER:
“It’s about a millennial and Gen Z mindset. It’s a mindset that people want to stay in a hostel, they want to experience that social experience, and they want to be mixing and milling with people of all ages.” – Thomann
As big believers that hostels have no age limit, we loved this quote about mindset trumping date of birth when it comes to hostel guests. In recent years, the appeal of hostels has broadened to include different types of travellers – from families to flashpackers, business trippers to older travellers. This is great news if you provide private rooms, plus these guests often have more disposable income to put towards upgrades and activities. However, you might find this change benefits more than just your bottom line – as we know from experience, a mix of ages and backgrounds often makes for more interesting conversations at the hostel bar!
ON THE INTRODUCTION OF CO-WORKING SPACES:
“We’re just starting a product where you buy your room for a month and you get a workspace to go with it. I think this is somewhere where the segment will be going to… I’d say watch this space.” – Thomann
As we mentioned in our 5 key takeaways from WYSE’s recent New Horizons report, digital nomads – that is, location independent workers – are a growing market. This trend shows no signs of slowing down any time soon with a predicted 50 per cent of workers to be working remotely by 2050. Other brands who have tapped into this trend are Selina hostels and Tribe Theory who place a big emphasis on providing co-working spaces and communities for travellers. For independent hostels looking to appeal to this market, having a designated common area for workers or offering packages in conjunction with local co-working spaces is a good first step (it goes without saying that fast, free Wifi is a must!).
ON REDUCING RELIANCE ON OTAs:
“We’re becoming very exponentially less and less reliant on OTAs [online travel agencies], and that’s got to do with everything from the type of marketing tactics that we’re doing on our brand.com, but it’s also through everything we’re doing on social and through brand partnerships.” – Rieff
Driving direct bookings is clearly a key focus for Generator – as it should be for all hostels. While OTAs are important for any accommodation provider, dependency on any third-party is never ideal and rising commissions definitely eat into your revenue. As Rieff mentions above, strong digital marketing and social media can play a huge role in reducing OTA dependency. Check out our previous blog for some more detailed tips on increasing your direct bookings.
OUR CONCLUSION…
Contrary to our ever-so-slightly dramatic headline, hostels definitely aren’t a dying breed.
Regardless of what we’re calling it, travellers are increasingly choosing the hostel experience over that of budget hotels. They want more than just a bed for a night. They want the buzzing social spaces, the local-led activities and the sense of community – all the things that hostels do best.
Travellers themselves care less about what you call yourselves and more about what others call you – that is, what other guests say about you – especially online as digital word of mouth is proven to drive bookings.
The bottom line – make providing and promoting an outstanding experience your focus and you won’t go far wrong.
To read the full Skift article, click here.
