Hostel: the S is for social

December 20th, 2017 | | Accommodation

On warm summer nights, walking past numerous Kings Cross hostels I see backpackers gathered on the pavement out the front. I can hear them chatting in English, French and German and smell their dinners wafting out from the hostel kitchens. The energy of so many people from different places all living together fills the air with excitement. An electric and fun atmosphere is something backpackers don’t get if they book with Airbnb. It’s this social experience, the S is what separates „hostel” from „hotel,” that backpacker hostels must emphasize in order to successfully compete.

Hostels are no longer the cheapest bed

In 1912 Richard Schirrmann opened the first youth hostel because there was a lack of affordable accomodation for young travellers. Fortunately for him, a marketplace for letting spare rooms didn’t exist in Germany at that time. Exactly 100 years later, Airbnb arrived in Australia. So for a backpacker arriving in Sydney, the following is an example of the two compared, at the time of writing:


Hostel on Hostelworld Apartment on Airbnb
  • 7.6/ 10 rating
  • Glebe, Sydney
  • 12-bed dorm
  • $24 per night, 10 night minimum
  • 4.5/5 rating
  • Glebe, Sydney
  • 4-bed shared room
  • $14 per night, no minimum


There are many reasons a backpacker would choose the hostel over the apartment, including marvellous staff, barbecue nights, and social atmosphere, but if the hostel were to rely on cheap prices to fill their beds, they will have a hard time competing against the apartment. Employees and fire sprinklers cost money, and when those are added to the price, it’s all but impossible for a backpacker hostels to compete with someone’s spare room.

The sharing economy is here to stay

As short term holiday letting continues to grow rapidly and play an increasingly important role in the tourism sector, there is a hope that government regulation will make competition from Airbnb go away, this is not a safe strategy. Hotel data shows that nearly 1 in 3 holiday beds in Australia comes from Airbnb or Stayz. Consulting firm Deloitte found that in 2015 Airbnb contributed more than $1.6B to Australia’s GDP and supported more than 14,000 jobs. Those numbers will continue to grow, as Australian listings on the platform have increased 40% in the past year alone. It’s unlikely that if and when State governments decide how to regulate Airbnb that the threat to backpacker hostels will greatly diminish.

Social vibes as a competitive edge

If competing on price is no longer viable, hostels must compete by creating a social experience and fun atmosphere. Hotel tycoon Ian Schrager believes that communal spaces are the best defence against Airbnb. Fortunately, almost every space in a hostel is communal. The amenity of a common room, where backpackers make new friends and create lasting memories, is one that an isolated Airbnb apartment is unlikely to provide. Hostel activities like free meals and day trips will also continue to play an important part in differentiating the experience. So communal spaces and social activities are the best way to set a hostel apart from Airbnb, not price.

Easy ways to match Airbnb’s offering

Travel bloggers, when debating the pros and cons of choosing an Airbnb over a hostel, readily acknowledge that if you want to meet fellow travellers, the hostel is your best bet. When looking at Airbnb’s best features, there are a few that hostels can emulate. To many travellers, staying in an Airbnb is like ‘living as a local’ because the accommodation is a private residence in a residential neighbourhood. Hostels can help backpackers feel they’re living as a local by offering unique local activities that take guests off the typical tourist track. Airbnb users also enjoy interacting with their hosts, who are frequently good sources of information about the local area. Hostels can ensure that staff are trained to offer recommendations that are unique to the hostel, as opposed to just opening Google each time a guest approaches the reception desk with a question. These small changes can help a hostel feel more „local” and give prospective guests less incentive to book an Airbnb instead of a hostel.

To millennials it’s the experience that matters most

Today’s millennial backpacker is on a quest for unique experiences, especially ones that look good with an Instagram filter. To attract them, backpacker hostels need to offer more than low prices. The „S” in hostel is for social, and that social experience, not a low price, is what makes backpackers choose a great hostel.


One Response

  1. Mark Cameron says:

    Hi folks,
    when i worked for YHA we celebrated the centenary in 2009 – before the opening of Altena youth hostel in 1912 schools were used during holidays to accommodate youth from the cities who went on excursions in the countryside. This first happened on 26 Aug ,1909 which is celebrated annually as Richard Schirrmann day.