Like many successful companies, Hostelworld resolves to win by maintaining its focus on what it does best: Selling hostels. Its big challenge is to generate more awareness about the modern and socially oriented hostel while larger players like Airbnb and Booking.com suck the air out of Google.
Modern consumers will naturally move towards the ideas that best fit with the way they travel now. Hospitality brands that can keep up will reap rewards.
Hostelworld needed to automate the online booking of hostels because there just wasn't enough money in it if employees or call center agents had to handle bookings over the phone. The company gave away free software to attract owners and then came up with a business model that was midway between Expedia's prepay model and Booking.com's pay at the hotel formula.
Sure, budget travelers have Airbnb as a more affordable lodging option, but what about those who don't want to stay in someone's home? U.S. cities are largely missing out on those visitors who want something half way between a home-stay and hotel experience.
Knowing exactly who a hotel brand's customer is gives it the freedom to build events and an an ambiance just for them, without fear of turning off smaller demographic groups.
Generator is the leader of the design-savvy hostel market, an asset class that's become increasingly popular with sophisticated young travelers and money-conscious adults.
Trivago's new shared-room search reflects the born-again trendiness of hostels -- which are no longer called youth hostels -- and apartment shares. Booking.com and Kayak already have it, and others will add it.