Hostels Are Hot

No longer the go-to spot for college students on a budget, hostels have been reimagined.


Once upon a time, no college student’s tales of a summer spent traipsing through Europe was complete without the requisite hostel horror story. But while these low-budget, dorm-like spaces were once the only choice for those with limited funds, many of today’s hostels have been reimagined to appeal to a more upscale audience.

Not yesterday’s hostel

The hostel today is probably very different from what many people associate with the name. For instance, a hostel marketplace survey conducted by Phocuswright found that nine out of 10 hostels now have private rooms. The dorm-esque image that has plagued hostels for decades is no longer the norm.

The market for this category is currently valued at around $5.2 billion, and it’s expected to increase 7 to 8 percent year-over-year. Guests choose hostels for their lower cost and convenient locations, of course, but they also site the opportunity to meet fellow travelers as a reason they opted for a hostel. This is probably due to the fact that more than 70 percent of hostel travelers from the U.S. travel alone and are actively seeking to make connections with fellow travelers.

Who loves a hostel?

Millennials are big fans of hostels. They account for more than 70 percent of hostel travelers. This stay option appeals to this demographic for multiple reasons, including that many hostels repurpose unusual property sites, focus on eco-friendly options and use more unusual marketing techniques.

What’s more, the amenities that this group wants can now be found at many hostels. From free WiFi to social events, from bike rentals to onsite food options, the hostels of today are clearly broadening their appeal. Millennials crave the experiential, which is what hostels are all about offering. It’s no wonder that this travel-happy group is so fond of the quirky character that is part and parcel of the world of hostels.