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Youth Hostels :a spirited centennial

The concept of the youth hostel has just celebrated 100 years but is doing beautifully. The world of YHs is even experiencing a second childhood with the appearance of new players who are riding the wave of steady growth of youth tourism and plans to attract the Generation Y into its nets. These players are moving away from the non-commercial, associative original model of the International Youth Hostel Federation, to align with budget hotels. Does new competition lie on the horizon?

Constantly on the road… Thanks to the multiplication of cheap travel solutions, starting with low cost flights, the youth of the world wander everywhere. Backpackers on sabbatical, itinerant backpackers: this tourist market is unaffected by the crisis. According to the annual study by the Youth Travel Industry Monitor of the World Youth Students & Educational Travel (WYSE) confederation, the volume of arrivals generated by this clientele remained nearly stable in 2009 with respect to 2008. A simple parenthesis in a sharp climb… the crisis only temporarily slowed the growth mechanism which flirts with 10% each year vs. 4% on average for tourism overall. With 173 million arrivals last year, this important source represents 20% of that 4% according to the WYSE. And the world of accommodations is carefully watching the habits of a clientele that generated 300 million nights in 2009, up by 12% since 2007. Even if the 18-25 age group have a budget that is logically smaller than the baby boomers, the Y generation nonetheless remains an interesting target. The age group travels more than 7 times a year, and this average is growing steadily according to the OMT, and, another positive point, travel spending has increased by 40% over the last 5 years according to WYSE. Hoteliers, in particular those on the economy segment, are receiving a share of this cake. But this clientele turns first to the great outdoors or, more often, towards young people’s accommodations par excellence: youth hostels, a concept that celebrated its 100th birthday in 2009. But, ever since the opening of the first hostel –the Altena Castle in Germany– the idea of the German teacher Richard Schirmann has come a long way. As a whole, youth hostels represent 4% of accommodations available worldwide throughout a market that is very fragmented within which emerges Hostelling International (HI). The world federation, sole beneficiary of the associative movement founded by Richard Schirmann, now has 4,500 hostels worldwide in 80 countries for a supply of 300,000 beds – meaning as many as the Carlson group. Youth Hostels continue to convey their initial values, recognized by Unesco: a social role by offering very affordable accommodations, especially to the less well to do; an educational role since, it is well known, travel educates youth; a role of global diversity, a meeting place for different peoples fostering tolerance and peace.But alongside the hostels in the “historic channel” of Hostelling International is a gigantic amorphous group with a multitude of small properties. For a number of decades, increasingly structured and ambitious actors have been emerging out of it. A&O Hotels, Meininger Gruppe and Beds & Bars with St Christopher’s Inns whose most recent hotels opened in Paris: these groups have developed concepts that they are developing across Europe. In parallel, the website of Hostelworld –the Expedia of hostelling– offers global visibility to over 24,000 hostels. This emergence is not looked on highly by Edith Arnoult-Brill, the president of HI, who sees the commercial vocation of these players as a deviation from the initial concept (see interview) with respect to the social mission played by the original non-profit federation. Although this phenomenon remains very limited, it may also worry hoteliers. With prices between 20 and 30 euros and often ideal locations in city centers, new generation youth hostels are making the model evolve with flexible inventories where rooms for 2,3 or 4 people are increasingly numerous, with brand standards that guarantee a homogeneity of the supply throughout the network. Today the concept differs from traditional hotels and focuses on a clientele that is not afraid to share a room or kitchen, one of the founding concepts of youth hostels. But the sector’s improved range – some are even presented as boutique hostels – may seduce individual travelers of all ages, provided they accept a certain level of promiscuity, as well as cultural and athletic school groups, families –Scandinavians in particular – and even businessmen, a new target of the Meininger Gruppe. So could an ‘s’ be all that lies between “hostel” and “hotel”? “We have things in common with budget hotels. But we are more than that. Our concept combines the best that hotels and hostels have to offer,” explains Nizar Rokbani, executive director of the Meininger Gruppe. “The hostel market is a niche, but one that is gaining recognition. As clients get familiar with the product, they see its advantages with respect to budget hotels that are often insipid,” remarks Robert Savage, manager press relations at Beds & Bars, “we are not competing only in terms of pricing. We offer our clients an experience they cannot have at a budget hotel.” And this competition has only just begun… Interview : Edith Arnoult-Brill, president Hostelling International : Companies with a commercial vocation are investing the sector”“We are a private non-commercial association that reinvests all its profit in the development and quality of our network. We either own our hostels or rent public spaces. Today, increasing numbers of companies with a commercial vocation are investing the sector. I am not against it, however… In Paris, public authorities may have been seduced by the idea of having a new Youth Hostel. But the arrival of Beds & Bars, with St Christopher’s Inn, is a low blow. It is not a Youth Hostel, it is a 0-1* hotel. They might hide behind this concept but their goal is first and foremost commercial. In Germany too, the concept is experiencing disloyal competition that the celebration of the centennial of youth hostelling, with support from the chief of state, has weakened. But this phenomenon is global. We are seeing more and more small, down-market hotels assume the appellation of “hostel”. Thanks to that, they are able to gain visibility through distribution via websites such as Hostelworld, where they have global distribution they could not have otherwise. This is true especially in Latin America, a continent where we our approach is the exact opposite. We help hotels there become youth hostels that follow our standards. Inversely, the Chinese insist on the “youth hostels” appellation that allows them to stand out from the many economy hotels that are opening rapidly. Nonetheless, this phenomenon of competition made it possible for our associations to ask themselves the right questions. Ten years ago, the federation entered into a dynamic of quality by defining evaluation criteria leading to certification, that may be revised every three years, centering on five standards: reception, cleanliness, security, environment. The competition also pushed us to do renovations or take a different approach to real estate. In the United Kingdom, the association sold magnificent mansions in the countryside to reinvest in city centers, particularly in London where occupancy is very high.”

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