Hostelling and youth

Greg Richards Background – the global youth market

Major trends in youth travel

Youth travel accommodation and other accommodation forms Market dynamics Booking patterns The impact of hostels on the destination STAY WYSE research programme on the Youth Travel Accommodation (YTA)

Elements:

Review of youth travel accommodation research 2006

Survey of youth travel accommodation providers 2006/2007

YTA Survey 2008 – present

Surveys of YTA clients 2012 and 2017 Global youth travel

Stimulated by growing spending power, better transport options and combining travel with work, study and volunteering

Post WW2 expansion

Building peace and cross-cultural understanding

2015 – total youth tourism market = 23% of global travel, or 276 million international arrivals Why Youth Travel is Important Changing demand

Millennials/Gen Z Flashpackers Older backpackers City trips Decline of leisure travel vs directed travel Experiences Living like a local Growing demand for youth accommodation worldwide

2006 1.6 million beds in youth accommodation establishments worldwide, or 5% of total global accommodation supply.

Demand estimated at 293 million bednights in 2005

2014 – Phocuswright estimated 18,000 hostels worldwide, a market worth 5.2 billion euros Changing supply

More demand More demanding customers More professionalism

By the 80s, the needs of the modern-day traveller were changing. Young people were starting to travel widely. They wanted smaller rooms, better toilets and showers – the comforts and convenience of the modern world. Increasingly they began to book on the internet. Considerable change took place within YHA around this time with the establishment of a national framework and a professional management structure. Growth of hostels in London 12

10

8

6

4

2

0 Before 1990 1991-1995 1996-2000 2001-2006 2007-2013 1990 An expanding commercial sector

The Belgrade market 2014 (Budović A., Jocić N., Ratkaj I.) Percentage of establishments by bed capacity

45 40 35 30 25 20 15 10 5 0 Under 20 20-50 50-100 101-200 201-500 Over 500 Groups of 20+ Other persons 2% 10%

Groups of 10 to Individuals in 19 persons dorm-style 11% accommodation 53%

Individuals in private rooms 24% Guest mix Age group

70%

60%

50%

40%

30%

20%

10%

0% 14 or younger 15 to 18 19 to 24 25 to 34 35 or older 2014 2013 Direct booking sources 35

30

25

20 % 15

10

5

0 Own Email Walk-in Telephone Social Own website media mobile app Indirect booking sources 90 80 70 60 50 % 40 30 20 10 0 70 60 50

40 % 30 Direct bookings 20 Indirect bookings 10 0 OTA bookings – a duopoly?

50 45 40 35 30

% 25 20 15 10 5 0 Priceline Hostelworld Airbnb Expedia Hostelling International Business Expectations for next 12 months

60

50

40

% 30

20

10

0 Strongly Increase Stay the Decrease Strongly increase same decrease 40% increase in supply by major chains 2012 2016 Hostels Beds Hostels Beds A&O 22 14,000 31 22,000 Meininger 17 7,000 17 8,500 Generator 11 5,000 12 7,000 St Christopher’s Inns 17 2,000 20 Wombats 6 1,900 6 Equity Point 9 1,800 7 1,500 Plus Hostels 3 1,100 5 Hip Hop Hostels 12 1,000 20 Euro Hostels 3 900 4 100 34,700 121 Big and small – average occupancy

68

66

64

62

60 % 58

56

54

52

50 Up to 100 beds Over 100 beds Big and small – 3rd party bookings 35

34

33

32

31 % of % bookings

30

29

28 Up to 100 beds Over 100 beds Consumers: Accommodation used on last main trip

Hostel Hotel Apartment Family / friends Bed & Breakfast / private room Guesthouse, pension Student residence Other Self catering Tent / caravan Couchsurfing Campervan / motor home

0 5 10 15 20 25 30 35 % Via email Via social Over the 9% media phone 2% 5%

In person at 15% Online (broadband) 63%

Online (mobile access/app) 6% How did consumers book accommodation? Consumer accommodation booking channels

3rd party General travel Specialised website agent youth / 31% 13% student travel agent 11%

Tour operator 7%

Direct with Direct with airline, hotel private owner 22% 16% Hostel users and 3rd party websites

90%

80%

70%

60%

50%

40% Other travellers Hostel users 30%

20%

10%

0% Booked accommodation via Booked accommodation via third party website other channels Backpacker hostel spend by age group

500

450

400

350

300

250 euro 200

150

100

50

0 Under 20 20-22 23-25 26-29 30-34 Different travel styles

Variable Backpackers Flashpackers Global Nomads Age % over 25 38.2 44.3 37.1 Student % full time 54.7 42.8 53.5 students Trip length days 76.7 61.6 69.7 Expenditure euros 3236 3866 2562 Accommodati % using 23.2 47,2 18,5 on hotels Do you like to stay in hostels?

No 16%

Yes 84% Main concerns:

Safety New Markets – Lack of personal space Hygiene Chinese Millennials Comfort External factors - Sharing economy

50 45 40 35 30

% 25 20 15 10 5 0 Very Negative Neutral Positive Very negative positive Challenges – uneven regulation and operating conditions

Licence duration (years)

45,0%

40,0%

35,0%

30,0%

25,0%

20,0%

15,0%

10,0%

5,0%

0,0% 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years Destination reactions Rebel cities?

• Cities such as Paris, Amsterdam, Athens, Barcelona and Toronto, have started to produce a common framework for the sharing economy.

• “Having the 20 or 30 biggest urban markets of the world all operating under entirely different rules doesn’t do much good for anyone,”

• Airbnb – “we welcome the chance to educate cities” Gràcia according to Airbnb Hostel clusters Living the local life?

• WHAT IS THE NEIGHBORHOOD LIKE? • The eco JAM Hostel Barcelona is located in the bohemian neighborhood of Gràcia, one of the trendiest areas of the city. The neighborhood is formed by small streets and squares, most of them pedestrian, with bars and restaurants, studios and theaters, dance and art workshops, local shops and spaces with a personal touch that make them unique.

• Despite the modernity of the area, Gràcia still keeps its traditional spirit and maintains an important social and cultural fabric of small shops and lifelong residents.

• Gràcia is also a neighborhood of innovation and creativity. In recent years it has become an example of small commerce and businesses that promote ecology and sustainable development: second hand shops, ecological textile shops, bio bakeries, artisanal ice cream, etc. The new landscape of urban hostels

• Local • Bohemian • Cosmopolitan • Hip • Trendy • Creative • Ecological • Innovative • Cool bars • Artists • Normal • Everyday

Room for growth? Hostels by city population 250

200 Barcelona Paris

150 Madrid Berlin Hostels 100

50 Budapest

Hamburg 0 0 1.000.000 2.000.000 3.000.000 4.000.000 Population Hostels and overnights

250

200 Barcelona

150 Berlin

Hostels 100 Dublin 50 Hamburg 0 0 5.000.000 10.000.000 15.000.000 20.000.000 Overnights Hostels and Airbnb

25000 Barcelona 20000 Copenhagen

15000

Prague

Airbnb 10000 Budapest 5000

0 0 50 100 150 200 250 Hostels Hostels and tourism growth

250

200 Barcelona

150

Hostels 100

50 Hamburg 0 0 50 100 150 200 250 300 Tourism growth 1998-2012 (%) Hostels and life satisfaction

250

200

150

100 Number of hostels of Number 50

0 1 1,2 1,4 1,6 1,8 2 Life statisfaction index Conclusions

• Hostels growing in response to bouyant youth travel demand • More commerical operation • More institutional investment • More differentiation • Influence of OTAs • Turbulent external environment (regulation, Airbnb, etc) Moltes gracias!

• Greg Richards

• [email protected]

• https://independent.academia.edu/gregrichards