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Branded Hostels : Advisory Services

Challenging the Budget Hotel Sector – the rise of branded hostels

GVA RGA have recently worked with two clients who are developing a new breed of hostels in a number of key markets in the UK. The image of hostelling as an exclusive budget option for backpackers still stands today but rapid innovations in this market are changing those perceptions.

Accommodation standards have been raised and technology trends embraced to bring them in line with the young, sophisticated, image-focused and techno-savvy audience they serve. Such new developments have been welcomed by affluent young travellers and the adult gap- year market who have found favour with this budget option and with the added facilities. En-suite bathrooms, private rooms, restaurants and bars in hostels have eroded some of the lines between the hostel and budget hotel. There has been a focus on interior design and the new product will compete directly with some of the branded limited service product.

From a developer’s perspective they tend to be cheaper to build and offer an alternative product in crowded markets.

In terms of distribution – it is all about the internet. The consumer group tends to be sub 35 years old and tech savvy. Hostels are now loaded on a number of alternative distribution platforms such as laterooms or lastminute.com, specialist hostel bookers like Hostelworld or sharing other user driven sites such as Tripadvisor or via social network sites such as Facebook.

Hostel accommodation is the fastest growing global accommodation segment – although it ‘might not be for you’ ignore it at your peril!

Key UK markets GVA RGA has worked in, and have shown strong demand for this product, include: London, Edinburgh, Glasgow, Manchester, Newcastle and Brighton.

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