The Hostels of Your Youth Are Dead. Welcome to the New Era of Budget Boutique.

“Cool vibes” are becoming “expensive vibes”

Hostels were extremely popular in the mid-20th century because they catered to the budget traveler with no interest in frills and trends. Now, in many cases, hostels have become synonymous with stylish hospitality. Some properties have become so renowned for their unique aesthetic and “cool vibe” that they’ve morphed into destinations in their own right. But when hostels drink the trendy Kool-Aid, they start to lose what inherently made them attractive to some travelers in the first place and transform into something that more resembles a boutique hotel.

Nabila Ismail, a travel blogger who has worked at Urban Hive Backpackers in Cape Town and City House Hostel in New Orleans and stayed at dozens of hostels around the world, has seen the industry transform before her eyes. “As [hostels] become trendier, families and groups of people stay in them not knowing that they are hostels,” she tells Matador Network, “which takes away from the original vibe.”

As we all know from visiting that one cocktail bar with $20 martinis, trendiness is usually accompanied by cost. Once upon a time, a hostel’s main calling card was its price. If you didn’t mind sharing the room with five other people, you could get a dorm bunk for a few bucks per night. Now, while some budget hostels do undoubtedly remain, many are just as expensive as their hotel counterparts as they attempt to stay competitive.

“In Mexico,” says Ismail, “the prices have all gone up. In Tulum, a hostel during high season can run upwards of $100 a night in a dorm. I see them getting more expensive as time goes on and hostels try to stay in business.”

Asaf Ganon, Revenue Manager at Israel-based Abraham Hostels, echoed this sentiment, telling Matador Network, “In general, hostels in European city-break locations are becoming unattractive price-wise when compared with Airbnb, and the focus is increasingly placed on design and less on vibe.”

For many travelers, hostels used to be a mainstay of the international experience, particularly when it came to socialization. Now, even the allure of meeting new people isn’t enough to overwhelm the decline in value.

“I think now more of the people who stay in hostels tend to be travelers who want to see countries but also want the comfort of a community around them,” says Janaína Colomba, a travel writer who now prefers couch surfing to hostels. “They want to be surrounded by people from their own culture so hostels tend to be full of Americans, Europeans, and Brits and people from more privileged countries.”

James Rae, a Scottish expat who grew up in Saudi Arabia, currently works as an international DJ and has spent years traveling through hostels around the world.

When asked if hostels still provide good value for the experience they offer, he told Matador Network, “Not really. Hostels have gotten very expensive and very hipster in recent years. Now, from what I’ve experienced, people stay a couple of nights until they make friends and then either ask for a discounted rate to continue their stay or move on [to an AirBnB].”

The rise of Airbnb and boutique hotels

Hostels versus Airbnb? Airbnbs have irrevocably changed the hospitality game in many cities around the world. In an age when travelers crave authenticity and local experiences, Airbnbs allow you to travel without feeling like a tourist. They’re the opposite of a hostel where you’ll be sharing a living space with six random Americans. Sure, you could spend $100 to sleep in a bunk bed, or you could spend $20 more and have an entire Parisian apartment to yourself.

“Airbnb is vying for the same customers as us,” Ganon said, “especially those [traveling in groups] prepared to stay in dorms, while at the same time affordable boutique hotels are vying for the type of customers that would happily book one of our private rooms.”

The rise of boutique hotels has been cramping the style of hostels, too. Boutique hotels offer a similarly pared-down hotel experience at budget prices, but with the added benefit of more room amenities, breakfast options, and, of course, private rooms.

“When it comes to the competition posed by affordable boutique hotels, one of the reactions in the [hostel] industry is to up the game and provide higher quality private room accommodation in hostels,” Ganon says. “In our hostels, this led to the creation of the Superior room category, where we basically converted a substantial number of our Economy rooms to include a smart TV, a coffee and tea corner, a desk and chair, upgraded bedspreads and cushions, a safe, and a mini-fridge.”

Some, however, don’t believe hostels are competing directly with boutique hotels. According to Lisa Jordan, Vice President of Marketing at Hostelling International USA, “The boutique hotel concept is frequently driven by a food and beverage experience for additional cost to the guest, whereas hostelling is often a purposeful, even transformative, life experience focused on the people that guests can meet and the local activities they can have.”

Whether the rivalry is friendly or unfriendly, the popularity of boutique hotels is dragging many hostels into unfamiliar territory. Adapting is necessary for hostels to survive, but it’s also forcing the industry into an identity crisis.

Hostel culture is evolving

Travelers seek out hostels for the cost and stay for the community. But that community just isn’t what it used to be. Pit stops for wayward backpackers, defined by their kumbaya spirit, are giving way to hostels better suited for 20-somethings using their college graduation money for a cushy jaunt abroad.

According to Ismail, the reason hostel room prices are going up is because “they’re getting fancier each year with amazing decor, events, and offerings to compete with [other hotels]. As one who’s worked at hostels and stayed, the community and the staff are really what make it an experience. As more hostels enter the ‘hotel’ industry, some of that personalization is lost.”

Rae believes that hostels are evolving into something that more resembles extended-stay housing. “When I was traveling through Australia, I saw a trend develop: Hostels as long-term accommodation,” he says. “Travelers in Brisbane and other parts of the Northern Territory couldn’t afford to rent their own apartments … so instead, they rented space at hostels long-term. That way, hostels became places where people no longer dropped by for a night or two but actual ecosystems for expats trying out life in a new country.”

Some of these changes aren’t necessarily bad. Hostels are innovating to keep guests engaged, building community through group events and restructuring to meet the evolving needs of travelers. This means that the cost will inevitably go up. Offering a range of amenities and group activities, and adding communal spaces for gathering and coworking, might be necessary to meet the expectations of the modern traveler, but it comes at the expense of the classic hostel experience.

“More and more hostels are turning corporate,” Ismail says, “and the culture can be lost in some of the fancier, bigger name hostels. Especially when employees work there who’ve never stayed at a hostel, traveled, or worked in customer service before.”

Jordan believes design-focused hostels are now mimicking design-focused hotels, with more emphasis on technology than ever before. “The overarching trends are technologies facilitating guest convenience and service,” she said, “from the rise of search engines to mobile booking capabilities to social media status sharing to the check-in process. More recently, there has been a trend of hostel brands that host digital nomads.”

Indeed, digital nomads — with their heavy reliance on technological convenience — could prove instrumental in shaping the evolution of the hostel industry in the coming years. Ismail points to the growing popularity of coworking spaces, and digital nomadism as key to the industry’s evolution.

“As people work remotely,” she says, “maybe more hostels will adopt a working space for people. I see them evolving into more boutique hostels or hotels, so they seem luxurious, trendy, and have extra privacy but still allow for community building if you so choose.”

Like any other industry, hostels will surely adapt to improve their chances of survival. You may still find yourself staying at a hostel on your next trip — you just might not recognize it.