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Hostels Are Gaining Ground With Business Travelers

By / Sep 25, 2013 The Generator Hostel location in London shows off the chain's interior design chops. (Generator Hostels)

They may not have nearly as many amenities as the average four-star hotel, but hostels are an option business travelers are increasingly open to using. Why’s that? Because the offerings are improving.

Forget everything you remember about hostels from your old backpacking days.

OK, OK, a few things are still the same: The stays are still cheap, the beds are still bunk (though private rooms are often an option), and the locations are still mostly urban.

The changes, however, are nothing to sneeze at: Hostels are getting some serious style, especially those in Europe, where their use remains strongest. For a certain stripe of business traveler, staying at a hostel might be the route to hitting an association event on the cheap—a route that might be even more desirable if current design trends reach hostels in the States. More details:

The trend: As noted by The New York Times, business travelers are a small but increasing portion of the the hostel business. In a 2012 survey of hostel operators worldwide by industry trade group Stay Wyse, the percentage of total guests per year accounted for by business travelers had increased from 12 percent in 2010 to 14 percent in 2011. Stay Wyse says the increase is being driven by hostels’ improvements. “With the investment in facilities, we predict this will grow at a steeper rate year on year,” the group’s Laura Daly told the Times.

We have great ambitions in the U.S. We’re in negotiations in New York now, and we’re looking at Washington, DC, Miami, L.A., and Boston.

Why the uptick? For one thing, these venues have started to focus more on the interior design of the public spaces, creating the kinds of communal rooms you might not find at traditional hotels but that work well for travelers focused on meeting new people in a city—think TV rooms, quality kitchens, and even cinema-style setups. You might also find a few things you’d expect at hotels, like conference rooms or swimming pools. One chain in particular—Generator Hostels, which has locations in seven European cities, with two more coming—has become known for offering a more upscale type of hostel experience. And it’s not afraid of crossing oceans—in fact, it’s angling to, according to Skift. “We have great ambitions in the U.S.,” Josh Wyatt, the Harvard MBA who founded Generator Hostels, told the publication. “We’re in negotiations in New York now, and we’re looking at Washington, DC, Miami, L.A., and Boston.”

Could it play in the USA? Maybe. If Generator Hostels moves into the U.S. market, it wouldn’t be alone in mining the social-but-cheap niche: New York City micro-hotels such as the Pod Hotel and The Jane have targeted a similar crowd, and the rise in popularity of online rent-a-home services like Airbnb has proven that some consumers would rather stay in a great neighborhood than a great hotel. But one hospitality expert who talked to the Times, Bjorn Hanson of New York University’s Tisch Center, noted that there are more consistent budget models in the U.S. and “wider acceptance to nontraditional lodging formats” elsewhere.

When going out of town for an event, would you consider staying at a hostel—especially if it was a really nice one? Offer up your take in the comments.

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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