Every fortnight, we give you a run down of the latest hostel industry news and offer our insight (we can also provide a variety of GIFs for your entertainment, too!).
HOSTELS + TOURS = WINNING COMBO
Last week, two successful hostel operators spoke to in-destination event organisers, Arival, about how they have built successful tour businesses – and how tours can be a ‘major strategic focus for accommodation operators’.
For Abraham Hostels & Tours – who currently operate three hostels in Israel’s major tourism hubs of Tel Aviv, Jerusalem and Nazareth with plans for further expansion in the future – tours are a huge part of the business. In fact, their tour division has become the largest business unit within the company, working together in unison with their hostel operations. The hostels provide a key target audience to market their activities and experiences to while tour customers also become guests at their hostels.
“About 70% of people going on the tours are not hostel guests. That allows us exposure to a greater audience, and many become our guests,” said Gal Mor, co-founder and partner overseeing strategic initiatives, “For people staying at the hostel, we give them a discount so if they’re staying at the hostel anyway they can go on the tour.”
While their tours, activities and experiences have proven very popular, Abraham do not see this arm of the group as ‘just another stream of revenue’ but key to the company’s strategy ‘to serve its customers and stay relevant as traveller tastes change’.
“The segment of independent youth travel is growing at the fastest pace, as is the demand for experiences and social interactions. That’s more important to them than a posh room or a fancy meal,” said Mor. “They’re looking for deals on flights and accommodations so they can use that savings to buy experiences, and usually, an experience that is iconic to the destination.”
Gal describes one of the workshops they offer at each of their hostels where staff teach travellers how to cook in the style of local cuisine, adding: “It’s a great way to meet people – that’s the secret sauce; the interaction is key.”
And Fabio Coppola, chief visionary officer and co-founder of boutique Rome hostel YellowSquare, agrees.
While YellowSquare’s roots are firmly in hostel accommodation, Coppola does see tours and experiences as pivotal to the company’s future. So much so that they have launched a tours division – YellowGuides – which offers activities including features walking and bike tours, wine tastings and an escape room.
YellowSquare also offer cooking classes – called Kitchen of Mamma – that have become very popular with the hostel’s guests. “It creates an opportunity for the guests to learn about local food but also to get together with other guests,” said Coppola, “That experience with each other is what makes this special.”
While other accommodation providers might be catching on – take the likes of Airbnb with their recent addition of Airbnb Experiences – we think hostels have a huge opportunity to dominate this part of the youth travel market. After all, offering unique, locally led experiences is what hostel’s do – and will continue to do – best.
MEININGER HEADING STATESIDE
‘European hostel-hotel concepts with large shared rooms are beginning to grow their presence in D.C.’ – Source.
European hostel giant Meininger have announced that they will open their first hostel-hotel concept in Washington in 2020 – hot on the heels of competitor, Generator, who announced plans to open their second location in the US in DC in 2018.
The new hotel – which will have 154 rooms and 616 beds – will offer a mix of both private rooms and dorm accommodation. It will also feature public areas on two floors with a bar, lounge, kitchen, breakfast area and game zone.
Hannes Spanring, CEO of MEININGER Hotels stated: “With an abundance of school and youth groups visiting, cultural offerings and as the political centre of the country, Washington D.C. is the ideal city to introduce MEININGER to the North American market.”
Meininger are expanding rapidly – their total number of projects under development has grown to 13. With 24 properties across Europe, they are now exploring opportunities further afield in South Asia too.
SAFESTAY ARE SOARING
Safestay continue to go from strength to strength – they have recently announced that their profits over the year stand at £3.4m.
The high end chain – with hostels in the UK, Spain, Portugal, Austria, Belgium and the Czech Republic – have seen revenue rise 39% to £14.6m and occupancy soar to 75.6% as their 18-34-year-old target audience continue to flock through the doors.
Larry Lipman, Safestay’s chairman, said: “The focus is to grow the brand and the company has the capital to support an increase from the 13 sites today to over 20, at which point the business will become self-funding and increasingly gain from economies of scale and brand growth.”
Safestay now has 2,762 beds as new hostels were acquired in Barcelona, Brussels and Vienna with fifteen other cities in Europe earmarked for sites.
The company adds that the market is growing at 5% and the £10.4m investment raised in December will allow them to carry out planned expansion.
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