Hostels: The Hot New Market

By Jackson Thilenius Principal, Retail Design Collaborative | December 30, 2018

With the rise of the sharing economy and the exponentially expanding competitive set within the hostel sector, the hospitality industry has been going through a number of dramatic shifts over the last few years. Brands like Airbnb and Uber, in particular, have revolutionized the way we travel, and continue to influence and inspire the development of new peer-to-peer platforms.

The Influence of AirBnB

Born from the simple plan to make a few bucks to pay rent, Airbnb has become a global phenomenon. With hotel rooms in San Francisco at a premium due to a large design conference in town, founders Joe Gebbia and Brian Chesky decided to turn their loft into a bed and breakfast that could cater to the young professionals seeking an alternative for overnight accommodations. The concept of providing "the basics" at a discounted price turned Airbnb into an industry giant worth in excess of $25 billion. With over four million listings in more than 190 countries, Airbnb's influence and relevance go far beyond that of most traditional hotel brands. Shockingly, this is not a new idea. My grandmother used to tell me stories about how traveling preachers in the 1800s would be provided accommodations on sleeping porches as they passed through rural towns. And youth hostels have been doing it since the early 1900s. It's not surprising then, that the growth of the hostel market space is primed for the millennial mindset of capturing value, and trading perceived luxury for experience.

Amenities, such as private phone booths, provide some much-needed privacy in an otherwise communal environment.

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Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.