Is Airbnb a threat to hostels?
Hotels are not the only business being disrupted and threatened by the rise of short-term rental services like Airbnb. App-based rentals might even have a greater effect on hostels.
Hostels are a kind of no-frills travelers’ accommodation that is very popular in Europe, but less common in North America. A traditional hostel is essentially a dormitory that rents out bunks to travelers.
Historically, hostels have catered to younger travelers with a low budget, such as vacationing students. Many hostel guests backpack, hitch hike or travel across Europe by train. Most of the hostels in American cities cater to European travelers.
How Airbnb Threatens Hostels
The allure of hostels is that they are dirt cheap; on September 22, hostel Clink 78 was advertising a bed at 78 Kings Cross in London for just $16.91 a night on the website Hostel World. Hostels charge such low prices because they are no frills; guests sleep in bunks, use a common bathroom, share amenities like TV sets and showers, do their own laundry and at some facilities, they eat off what looks like picnic tables.
Hostels also have a nasty reputation. Any Google search on the subject will turn up dozens of horror stories about thieves, dirty common rooms and drunken sailors passed out on the floor. Not surprisingly there are a lot of travelers that will not go near them.
Airbnb is a direct threat to hostels because it can offer comparable prices, more privacy and greater amenities. A person traveling to London on September 22, 2016, could rent a tiny apartment near London Bridge for $23 a night on Airbnb. A room with a real queen-sized bed and a private bathroom, in Central London was renting for $40 on the same day. Most importantly the Airbnb guests will not have to share the dorm with a dozen college students.
How Hostels are Adapting to Airbnb
The threat Airbnb poses to hostels is obvious, but it is hard to measure because there are few statistics about the hostel industry available. Nobody seems to be counting how many people stay at hostels, or calculating the revenues.
Despite the lack of attention, hostels seem to be evolving and adapting for the digital age. Freehand, a next-generation hostel operator, is offering such amenities as rooftop pools, concierge service and private rooms, Bloomberg pursuits reported. The company is going after a different clientele as well: business travelers.
Another hostel operator; Generator tries, to attract guests with an environment that is more like a business incubator than a college dormitory. Generator’s hostels feature such amenities as board rooms and fully-equipped work areas. Stay Inn a hostel in Manchester, England, even features queen-sized beds.
The new hostels are trying to position themselves in an accommodation niche between hotels and traditional hostels. The new hostels offer more amenities at a lower price in an environment that can be easily rented on Airbnb if necessary.
Even Hilton is getting into the hostel business; by developing a hostel type brand of cheaper hotels in big cities, Bloomberg reported. The idea is meet the demand for cheaper no-frills lodging for younger travelers.
Is Airbnb Entering the Hostel Business?
The most intriguing new player in the hostel business is Airbnb itself. The company has built what looks like a hostel in the Japanese village of Yoshino.
The facility, known as Cedar House, doubles as a community center and accommodation for guests. Cedar House is the first project from Samara, Airbnb’s in-house think tank. It looks like a traditional Japanese country house but has some of the attributes of an American bed and breakfast.
Like a hostel; Cedar House aims to make travel into a communal experience. It might also serve as a model for next-generation hostels that can be replicated all over the world.
It looks as if Airbnb might save hostels and transform them into big business. Instead of going away, hostels might become the future of travel accommodation and short-term rentals.
