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MARKET SUMMARY

1.1 Presentation and definition

According to INSEE, a youth hostel is an establishment run by a non-profit association. It offers users limited accommodation and catering and/or individual cooking as well as other services, programs and activities. 

Hostels are distinct types of accommodations which date back to the beginning of the XX century. Indeed, the first hostel is believed to have been created in Germany in 1912 by Richard Schirrmann, who initially transformed spare school classes into bunkbed rooms.  

The conceptual and functional meaning of hostels though has far older roots. In fact, in the middle ages numerous structures were built with the aim to give rest to pilgrims or wayfarers. These structures were known as “hospices” – from the Latin word hospitium. In the 1900s those accommodations - originally known for their hospitality trait - have undergone numerous transformations which brought them closer to the image they have today. The peculiarity of these accommodations is the sense of sharing: generally, hostels have shared dormitories and shared facilities.

Hostels are typically preceded by the word “youth” which indeed enhances the intrinsic connotation of being thought for younger people, backpackers or travelers. A few traits are for example a common area and affordable pricing. Although, since lifestyle and travelling habits have drastically changed over time, hostels have adapted to a continuously different demand. In Europe, hostels are now flourishing as an alternative accommodation type to short term rents (e.g. Airbnb) or typical hotels, with numerous features such as private rooms, social events, additional facilities (e.g. swimming pool, coffee lounge), extravagant layouts.  [Cloudbeds]

In France, the historical market players are non-profit associations that offer low-cost housing throughout France. However, more and more private actors are trying to enter this promising market to create new concepts capable of seducing young Millennials eager to meet and travel.

1.2 A growing global market driven by the demand for 18-35 year olds

Turnover from the world market
The worldwide turnover of youth hostels is estimated at *.* billion dollars worldwide in **** depending on the site Hospitality On . According to a report on trends in youth hostels, it should be aware of commissioned by Phocuswright , growth of * to *% from year to year which would respectively ...

1.3 A healthy French market

Estimate of the size of the French market
According to the Federation of Youth Hostels, they have ** youth hostels in their network in July ****. The IB will list ** of them on * er january **** on the basis of FUAJ data, and ** sports centres (***)
According to the Yellow Pages, there are *** youth hostels ...

DEMAND ANALYSIS

2.1 The main categories of travellers

The different types of travellers can be grouped as follows

Source: ****
(***)For example, when travelling from home to work
The reasons for travellers' travel can be as follows:
Personal reasons :
Leisure, relaxation and holidays Visits to relatives and friends Health (***) Other staff reasons: Pilgrimages, sports events, school trips, etc.)  
Professional reasons ...

2.2 Cyclical demand

As expected, we have a higher demand during the summer season
Whether through the use of the word "hostel" or the use of the word "youth hostel", we have a very similar cyclicality
Search frequency with the word " hostel "in France

Search frequency with the word " youth hostel "in France

2.3 Expected growing demand

According to UNWTO, the world tourism organization, young traveller tourism is a sector that has been and will continue to grow: indeed, from **** to ****, global youth arrivals increased by **%, representing one fifth of international travellers. This trend will continue, since in **** *** million youth trips worldwide will be expected (***).

2.4 Une demande plutôt cyclique

En analysant la fréquence des recherches Google en France pour les termes « hostel » et « auberge de jeunesse », on remarque que la demande est très cyclique : elle atteint ses maximums entre mi-juillet et mi-août et ses minimums entre mi-novembre et mi-décembre.

Source: ****
Par ailleurs, on remarque aussi que ...

2.5 Les tendances de la demande

Voyage individuel
De plus en plus de personnes voyagent seules. Ce changement est visible à l’échelle mondiale, car les voyages traditionnels à un seul endroit sont abandonnés au profit de séjours de courte durée dans plusieurs endroits. 

Source: ****
Au cours des cinq dernières années, l'intérêt ...

MARKET STRUCTURE

3.1 The context of tourism and hotels in general

International tourism, number of arrivals (***)

Source: ****
According to the World Bank France continues to attract a large number of tourists with more than ** million arrivals in ****. While the official figure is not yet published for ****, the government has mentioned a "record" year and estimates at nearly ** million the number of international ...

3.2 Initially associative hostels that are increasingly of interest to the private sector

Traditionally reserved for the voluntary sector in France However, the youth hostel market is attracting more and more French and foreign private groups, attracted by a sector considered very profitable and still under-exploited.
Thus, more and more of these "hostels", which are renewing the youth hostel in a higher-end format were ...

3.3 A fragmented offer that leaves few places for groups

Despite the emergence of hostel chains, they remain quite limited in importance . For example, according to The Wandering Walker the Mad Monkey Hostel Group, which operates in Asia and Australia, owns "only" ** hostels, including * in South-East Asia. Similarly, the "Vietnam Backpackers' Hostels" have only * establishments in the world.
A
So, the ...

3.4 Bookings mainly made online

According to a figure published by the site Hotel trend already in ****, two thirds of youth hostel revenues were generated by online bookings (***). This corresponds to a young clientele, who want to be able to book from their phone.
Another source, from a bFM article based on figures from a Phocuswright ...

3.5 Competition on booking sites and social networks

The site MyFrontDesk refers to the possibilities for offering overnight stays in a youth hostel. There are three main types of sites for this purpose: the generalist hotel booking sites (***) and rental sites such as AirBnB.
A study of Hospitality Net conducted on youth hostels in Switzerland in ****, points out the ...

ANALYSIS OF THE OFFER

4.1 A standardised minimalist offer

By consulting the offers available on the Internet, it appears that the different offers of accommodation in youth hostels are very similar They offer a bed in a shared room or dormitory, access to sanitary facilities, as well as communal living spaces, such as lounges and cafeterias, so that they can ...

4.2 Comparison of youth hostel rates with other types of accommodation

The average rates of youth hostels and "hostels" are much lower than those of traditional hotels
Average price excluding tax of hotels in France in April ****, by category (***)

Source: ****
We can see that even the "super-eco" offers of hotels offer an average price higher than some inns: for example, vertigo offers ...

4.3 Price comparison between private groups and non-profit associations

Source: ****
While prices are rather close between private groups, it seems that fuaj (***) and this, whatever the type of room booked.

4.4 An expensive entry level product in France

By looking in the Hostelworld catalogue, taking the price for one person at the end of July **** in several European capitals and in several French cities we obtain the following table:
Source: ****
The chains arriving in Paris will be able to lower prices, since Meininger or France Hostels own or plan ...

RULES AND REGULATIONS

5.1 The current regulations

Like any establishment welcoming the public, hostels and youth hostels must comply with the regulations in force to safety and security - for the technical facilities in particular- and the rules of hygiene .
As far as youth hostels are concerned:
The reception of young people provided by the Ministry of Youth ...

POSITIONING OF THE ACTORS

6.1 Segmentation

Youth hostel chains :
St Christopher's Inns Generator Hostels Jo France Hostels Meininger
Independent youth hostels:
SLO Living Hostel Cool. Cool Vertigo Gastama
Association of youth hostels:
United Federation of Youth Hostels (***)

  • St Christopher’s Inns
  • Generator Hostels
  • Jo & Joe
  • France Hostels
  • Meininger
  • SLO Living Hostel
  • Cool & Bed
  • Vertigo
  • Gastama
  • Fédération Unie des Auberges de Jeunesse

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in 40 pages
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Analysts

chargé d'études économiques, Xerfi

Hugo Schott

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Associate Consultant

Mathieu Luinaud

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PhD Industrial transformations

Robin Charbonnier

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Analyst

Pierre Doussau

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President Ross Alumni Club France

Arnaud Walter

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Analyste de marché chez Businesscoot

Amaury de Balincourt

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Consultant

Pierrick Cudonnec

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Project Finance Analyst, Consulting

Maelle Vitry

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Héloise Fruchard

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EDHEC

Imane Essadiq

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Vincent Defrenet

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Eva-Garance Tison

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Market Research Analyst

Michela Grimaldi

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Azelie Prigent

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Cantiane Gueguen

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Consultant

Jules Decour

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Alexia Vacheron

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Emil Ohlsson

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Anna Oeser

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Gabriel Salvitti

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