Summary of our market study

As of 2020, the global hostel market has demonstrated significant growth despite facing challenges posed by the COVID-19 pandemic. According to the data, the hostel market's value was expected to reach approximately $6.4 billion in 2020, marking a 16% increase. The Italian hostel market, while relatively small, is part of a broader accommodation sector that contributes notably to the country's GDP. Despite the downturn in travel due to the pandemic, with the hospitality sector experiencing a collapse in presence (-92.3% for foreigners and -85.9% for Italians in March) and seasonal jobs at risk, innovative chains like "Ostelli Belli" expanded by creating new structures. The Italian government's introduction of a 110% bonus for energy renovations extends to hostels, offering potential financial relief and incentivizing sustainable upgrades. This suggests that hostels are adapting to new demands, balancing the need for competitive offerings with sustainability and safety measures in a post-pandemic market.

Shifting Tides in the Italian Hostel Market

A Dynamic Demand Landscape Within Italy's evolving accommodation sector, hostels have emerged as a vibrant and growing market segment. Traditionally associated with young travelers, hostels have expanded their appeal amidst demographic and lifestyle shifts. The Italian hostel market, though still modest compared to hotels and other types of lodgings, has seen a notable increase of approximately 42% in the number of hostels, rising from around 450 to 650 establishments across the peninsula. The demand for hostels is closely linked to factors such as tourism trends, demographic data, and overnight stays. Italy, with a tourism sector generating nearly 84 billion euros, has seen consistent growth in the accommodation and catering sphere, which accounts for about 43% of this revenue. Although Italy lags behind France and Spain in terms of international tourism visits, with France and Spain welcoming more than 80 million visits compared to Italy's 58 million, price competitiveness, particularly in the hostel segment, has witnessed improvement, indicative of rising demand for more affordable accommodation options.

Cultural tourism has sparked interest, especially among international travelers, who accounted for over 79% of hostel guests. Moreover, specific nationalities like Germans, who constituted 28.2% of foreign tourists, along with France, the United Kingdom, and the United States, have shown a strong presence in the Italian tourism and hospitality landscape. Notably, lifestyle and consumption habits are shaping the hostel market. As solo travel gains traction, with searches peaking in 2019, and consumers increasingly book their stays online, hostels find themselves catering to a tech-savvy and environmentally conscious demographic. Online booking platforms have seen a surge in hostel listings, with Hostelworld and Booking.com featuring 277 and 480 hostels in Italy, respectively. The hostel market is sensitive to global events, and the recent health crisis severely impacted travel, causing a steep decline in the trend of solo travel. The ramifications of these events have been widespread, with substantial losses anticipated in tourist presence and revenue for the sector in 2020. However, even amidst these challenges, some hostel chains like Ostello Bello have managed to grow, signaling a market that, while affected in the short term, may have underlying resilience and potential for rebound and expansion.

Key Players in the Italian Hostel Market

The Italian hostel industry, while experiencing ongoing challenges and transformations, is composed of several notable entities that continue to shape the landscape of affordable and social travel accommodations in the region. Below are some of the primary players who are making significant strides in this sector.

  • Ostello Bello: The Social Travel Enthusiast's Choice Ostello Bello, which has seen impressive growth and expansion, is a renowned name in the Italian hostel sphere. This chain has gained recognition for enhancing the hostel experience, turning accommodation into an opportunity for social connections and cultural exchange. Known for its vibrant atmosphere and community-oriented approach, Ostello Bello has successfully established itself as a favorite among young and solo travelers seeking both adventure and comfort.
  • Generator Hostels: Redefining the Modern Hostel Bringing a fresh take on hostel accommodations, Generator Hostels merges the concept of modern design with the traditional hostel experience. Offering a more upscale approach to budget-friendly travel, this chain has carved out a niche for itself by providing stylish and contemporary environments for their guests. Their presence in Italy further diversifies the hostel market by attracting travelers who value aesthetic appeal alongside affability and affordability.
  • The RomeHello: A Capital Encounter As the name suggests, The RomeHello is a hostel situated in Italy’s historical and vibrant capital, Rome. Welcoming travelers from all corners of the globe, this hostel provides not only a place to stay but also encourages the exploration of the city's rich cultural heritage. Its location and amenities make it an attractive option for those seeking convenience and community during their Roman holiday. #### Babila Hostel: Milan's Chic Stayover Milan, known for its fashion and design, is home to Babila Hostel, which caters to guests looking for a budget-friendly but chic place to rest. Aligning with the city's stylish reputation, Babila Hostel offers travelers a sophisticated yet affordable accommodation option that doesn't compromise on comfort or the opportunity to mingle with fellow adventurers.
  • Anda Venice: The Youthful Venetian Retreat A relative newcomer, Anda Venice, brings the spirit of camaraderie and youthful energy to the iconic city of canals. Tailored for the contemporary traveler, this hostel emphasizes both sociability and style. It adds yet another dimension to the diverse Italian hostel market by blending the traditional allure of Venice with a dynamic, social environment.

 

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Summary and extracts

1 Market summary

1.1 Definition and presentation

Hostels are distinct types of accommodation that date back to the early 20th century. Indeed, the first hostel was reportedly created in Germany in 1912 by Richard Schirrmann, who first transformed free school classes into bunk-bed rooms.

The conceptual and functional significance of youth hostels, however, has much older roots. Indeed, in the Middle Ages, many structures were built to provide rest for pilgrims or travellers. These structures were known as "hospices" - from the Latin word hospitium. In the 1900s, these accommodations, originally known for their hospitable nature, underwent many transformations that brought them closer to the image they have today. The particularity of these accommodations is the sense of sharing: in general, inns have common dormitories and common facilities

Hostels are usually preceded by the word "youth", which reinforces the intrinsic connotation of being designed for young people, hikers or travellers. Notable features include, for example, a common space and an affordable price. Although, since the way of life and travel habits have changed radically over time, hostels have adapted to an ever-changing demand. In Europe and especially in Italy, youth hostels are now flourishing as alternatives to short-term rentals (e. g. Airbnb) or typical hotels, with many features such as private rooms, social events, additional facilities (e. g. swimming pool, coffee lounge), extravagant facilities. [ Cloudbeds ]

 

1.2 A global market and a European mindset

Phocuswrite estimated the value of the global hotel market in **** at about USD *.* billion. This figure is expected to reach about $*.* billion in ****, with projected growth of ** per cent.

Revenues for hostels World, ****-****, millions of USD Source: ****

According to the **** annual report of Hostelling International Europe has the largest number ...

1.3 An even smaller Italian market

The Italian market for the hostels is still quite small. However, the whole sector of accommodations, hostels included, represents a significant part of the Italian GDP. Indeed, in the last years this sector increase:

PIB direct généré par le tourisme Italie, ****, **** et ****, en % Source: ****

Italian hostels in the ...

1.4 The sector in the face of crisis

The situation

The tourism is in great difficulty. A large part of the hotels are closed, for lack of customers. Italian and foreign demand is reduced for various reasons: travel restrictions, reduced spending capacity, less free time available (***), cancellation of events, reduced public transport capacity. The few hotels in activity are ...

2 Demand analysis

2.1 Overview of the request

Hostels represent a relatively small share of the hotel industry. Despite their reduced presence in the world compared to other accommodation facilities (***), demand for this type of accommodation could benefit from demographic and lifestyle changes

The demand for hostels, like any other accommodation structure, is directly dependent on the following three ...

2.2 Market Determinants

New demographics

Millennials - defined by the Pew Research Center as peopleborn between **** and **** - represent about ** billion people in Italy in ****.[***] This age group is gradually changing their means, modes and travel habits

According to Topdeck travel, **% of Millennials in the U.S. are looking for the experience of living ...

2.3 Lifestyles and consumption habits impacting the hostel market

Individual travel

More and more people are traveling alone. This change is visible around the world, as traditional trips with a single destination are being abandoned in favor of short-term stays in different locations.

Evolution of the "solo travel" trend Italie, juin ****-juin ****, en % Source: ****

The solo travel trend peaked in ...

3 Market structure

3.1 Market organization and dynamics

Overview of the hospitality sector

The broader category of hospitality includes all types of accommodation structures, from the most numerous (***). In ****, Italy is the leading European country in terms of the number of accommodation units and second only to France in terms of the number of beds available. [***]. The North East ...

3.2 Distribution: regional preference and booking method

Geographical distribution

Tourism and tourism

As mentioned, the arrival and overnight stay of tourists - both domestic and foreign - are directly correlated with the occupancy rate of inns.

Presence touristique par région Italie, ****, en % Source: ****

Geographically, the tourist concentration of recent years has placed large cities in pole position. ...

4 Analysis of the offer

4.1 From the initial offer to the luxury concept

The first youth hostel was created in Germany by German professor Schirrmann to provide his students with out-of-town housing. The facility was seen as a place where young people could sleep for little money in exchange for small hosting services

With a rapid increase - about ** years - Germany had more ...

4.2 Essential characteristics for an acceptable budget

Hostels are representative of a specific target consumer: the backpacker. [ Hostelclub This specific orientation of the target consumer is due to its positioning, the original type of accommodation was specifically designed as a social and affordable structure, where travellers can interact and share their experiences as well as the equipment

The ...

4.3 Social networks and influence on the destination

Demographic and social changes in society have contributed to the advent and impact of social networks in the travel industry

The data shows the relevant impact of online messages on housing, location and other decisions. Instagram has indeed helped to perceive differently - through a screen - these images of places, ...

4.4 Alternative offers

Hostels are often included in the broad category of "other accommodation facilities", along with campsites, guest houses, agritourism and others.

Recently, the number of hotels has been reduced in favour of these alternative accommodations. In fact, between **** and ****, the number of hotels gradually decreased. In ****, the number showed a positive variation, ...

5 Rules and regulations

5.1 Regional regulation

Hostels, like any other activity or company in Italy, must first comply with local standards and requirements. The space must be adapted to accommodate bedrooms, bathrooms, service rooms and all that is necessary

The classification of accommodation establishments is established in accordance with regional laws. Usually, there are three types of ...

5.2 New regulation post Covid-19: 110% for hostels as well

With the update of article *** and ***, DI **/****, converted into law **/****; article *, paragraphs **-**, law ***/****, of Budget for ****, the Italian government has extended also to hostels the possibility to benefit from the ***% bonus for the energy renovation of the structures.

In fact, hostels can be non-profit foundations or not (***) from the ***% bonus. ...

6 Positioning of the actors

6.1 Segmentation of actors

  • Booking.com
  • Generator Hostels
  • PLUS
  • a&o
  • RomeHello
  • Babila Hostel
  • Anda Venice Hostel
  • 5 Terre Backpackers
  • HostelWorld

List of charts presented in this market study

  • Chiffre d'affaires du marché des auberges de jeunesse
  • Number of youth hostels
  • Distribution of the number of facilities
  • Direct GDP generated by tourism
  • Revenues of the tourism sector
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Latest news

Tourism: Booking.com joins forces with CléVacances to better compete with Airbnb - 20/07/2022
  • CléVacances: 13,000 approved accommodations
  • Booking.com: 160,000 accommodations in France
  • The booking platform will offer the 13,000 accommodations certified by the French association. It is thus enriching its offer in "alternative" accommodation (excluding hotels), while CléVacances sees the opportunity to attract a more international clientele
  • Bookingmettra en place un filtre consacré à son nouveau partenaire

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Booking.com
Generator Hostels
PLUS
a&o
RomeHello
Babila Hostel
Anda Venice Hostel
5 Terre Backpackers
HostelWorld

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