Hostel - Industry Growth

Industry Growth

The independent hostel industry is growing rapidly in many cities around the world, such as New York, Rome, Buenos Aires and Miami. This is reflected in the development and expansion of dozens of hostel chains worldwide. The recent eruption in independent hostels has been called "probably the single biggest news in the world of low-cost travel and very safe".

The development of independent backpackers hostels is a strong business model, with some cities reporting a higher average income per room for hostels than hotels. For example, in the city of Honolulu, Hawaii, upscale hotels are reportedly making $141 to $173 per room, while hostel rooms in the same city can bring in as much as $200 per night. Even during the 2008 economic crisis, many hostels are reporting increased occupancy numbers in a time when hotel bookings are down.

Even as the city’s hotel occupancy rate has fallen to 66 percent in February, from 81 percent in the same month last year, despite steep discounts, many youth hostels are reporting banner business. —New York Times

Though in the past, hostels have been seen as low-quality accommodation for less wealthy travellers, at least one Australian study has shown that backpackers (who typically stay at hostels) spend more than non-backpackers, due to their longer stays. Backpackers make up as much as 10% of international visitors in Australia. In New Zealand, backpackers hostels had a 13.5% share of accommodation guest/nights in 2007.

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