How Luxury Hostels are Changing the Game

By Alex Gaggioli, September 23, 2015

Traditionally, hostels have unfairly received a bad reputation. Movies and television often portray hostels as low-quality and cheap, when in reality, these properties have transformed into something completely different. Since joining Cloudbeds, I have been generally surprised by the many different types of hostels, as I outlined in a previous post, 8 Types of Hostels to Visit. The travel industry is now producing a new type of hostel property–one that caters to luxurious preferences, convenience, and community.  

Forbes recently published an article about the transformation many hostels have undergone, highlighting a chain called Generator Hostels. Generator Hostels promises to be a new breed. They have 11 properties in nine cities across Europe with plans to open 15 by the end of 2018. Their properties are design-driven with luxury kept in mind. They maintain everything that is good about a hostel, such as shared spaces and culturally-centered events, while bringing new amenities to the table, like beautiful artwork and fast wifi. I’m seriously feeling the need to travel to Europe after perusing the amazing photos of their properties.

Generator Hostels isn’t alone. They are playing into a bigger shift in the hospitality industry as hotels and hostels become more ingrained in local culture and unique design. While many hostels don’t self-identify as “luxury”, they still provide excellent service and maintain clean premises. They target other travel niches with which hostels are often associated, such as parties, adventure, and urban events. Many hostels decorate their properties with beautiful, local art, to create an authentic experience.  Many properties don’t identify as “luxury”, and still have value and a party-culture at their core.

Today, hostels are held more accountable to quality standards than ever before. Hostel booking websites such as hostelworld.comhostelbookers.com and hostels.com give travelers the tools necessary to pick a quality property and leave accurate views based on their trip. Before these websites appeared, guests found hostels primarily via word-of-mouth. This mitigated the fallout from one unhappy guest, and gave mistakes like poor service and bedbugs a small blast radius. Without question, hostel owners take pride in their properties. But today’s world of unlimited access to democratized user reviews encourages hostels to up their game. Online reviews hold hostel owners accountable, thus creating a better experience for everyone. After all, a hostel’s dirty secrets can be read from any phone these days.

I have had the pleasure of interviewing several properties for our Featured Customer Series such as Hostel 76 and Code Hostel. I discovered, unsurprisingly, that Hostel owners have great passion for their business. They politely boast about their properties’ cleanliness and the unique experience they offer. Hostel owners and managers are most passionate about meeting new people from around the world. In almost every interview, it was the desire to meet new people that drove them to open up their own properties.

Picture of Hostel 76's entrance and courtyard

Most hotel, B&B, and inn owners will say that guests are their number one priority, and while I believe them, hostels seem to offer a different level of service. Not only do hostel owners and staff give their guests excellent service, but hostel guests also seek to create new connections and make new friends. Meeting new people is not always a priority for travelers, but for hostel travelers in particular, it is.

Consumer attitudes about travel are changing. Innovation is happening. With the rise of companies like Airbnb, travelers are looking for more immersive experiences. Hotels are making an effort to feel more culturally inclusive, but it’s Airbnb and hostels who are winning.

budgettraveller.org highlighted how hotels are taking some lessons from hostels. Ace Hotel in New York and The Daniel in Vienna offer creative spaces for people to meet and hang out. These hostel-like hotels use local culture to drive design, and use local food, produce, and liquor to create an authentic experience.

Ace hotel's culture focused dining room

The growing luxury hostel trend in Europe is slowly making its way to the United States. Conde Nast reported of two hostel properties opening in Chicago and Miami Beach earlier this year. The Freehand located in Chicago is a hotel-hostel offering both private and shared rooms. The property is adorned with local art and has a distinctive “midwestern feel”, according to Conde Nast. The other property mentioned is owned by the same group, bringing affordable rates to Miami Beach. Both properties have the potential to set a real hotel-hostel trend off in the United States as they play off of Generator Hostel’s strategy. Create an authentic experience and do not over-charge people for it. A night in either property starts at just $35.

As a new generation of hostels is born, the entire industry is transformed. Luxury hostels, or “poshtels” as they are sometimes jokingly called, will set the benchmark for hostels and hotels alike, offering more amenities with greater style than ever before. Dirty and scary will only describe the hostels that fail to keep up, as hostels created with the guest in mind (and free Wifi) rise.


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