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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Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.