Category Archives for Research

Route 66

Return of the road trip

Did you know that road trips are back in fashion? Turns out we can only watch so many fiascos  or suffer through so many baggage fees (paying for a carry-on? Really? ) before many of us decide it’s time to pack up the SUV and hit the road. The particulars of the recent uptick in road trips can be a boon to the hostel industry. In particular, isolated, off-the-beaten-track hostels should take notice of the recent road trip trend.

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How many people are hitting the road?

Out of all American travelers, 46% are taking road trips. In 2016, 39% of all our vacations were road trips. This is up 17% from the previous year and road trips show every indication of increasing their share of our vacation time. Even more impressive is the increased spending on road trips. US spending on road trips exploded from $66.6 billion in 2015 to $113.7 billion in 2016.

Hostels can cash in on road trippers

Millennials are the core demographic for hostels and a third of their vacations are now road trips. The number one reason they choose a road trip is to lower their vacation costs. This is no surprise. America is a car country. Compare that to Europe where they have half as many cars, because who needs one when you’ve got 20 euro Ryanair flights, and the best public transportation in the world? 76% of road trips are with the traveler’s own vehicle, and when Americans have time off, that’s the easiest and cheapest way to explore.

Hostels should be an easy sell to these domestic millennial travelers and we should be doing all we can to persuade them to shun the $90 a night dingy motel and come to join us for a barbecue and a $30 bunk. Besides being more fun, sharing helps travelers stay on the road longer. The US Travel Association found trips with sharing economy accommodations lasted 7.4 nights in comparison to 3.7 for hotels, motels, or B&Bs. Besides tripping longer, road trippers are coming back more. MMY Global found that 55% of millennial and Gen X’ers without children, aka “Freewheelers,” say they will return to a destination previously visited this year. After all, you only need to climb the Statue of Liberty once, but do the Rocky Mountains ever get old?

Why road trips help the little guys

The road trip fad helps the hostels that are otherwise the most disconnected because you travel differently during a road trip. 54% of the road trippers that Ford surveyed said they prefer to take the scenic route. If your location rating is one of the weaknesses for your Hostelworld rating, know that trippers don’t care that you’re off the beaten path. Road trips are also beneficial to hidden gems because a whopping 32% of road trippers choose their accommodation on the fly, which means they have the flexibility to book in only once they’ve found a backcountry hostel.

A bi-partisan vacation trend

The time feels right for more American road trips, and more American road trips supported by hostels. Now is the time for Americans in our densely populated coastal regions to jump in the car and go experience the Midwest; to understand how we wound up in the Trump Era. 75% of road trippers say experiencing different cultures is a motivation for travelling, compared to 69% of non road trippers. The communal hostel experience is all about that exposure to different cultures.

The takeaway (the driveaway?)

The road trip trend is a valuable tailwind for the US hostel industry. It’s a great opportunity to widen our appeal to domestic US travelers, particularly budget-conscious millennials. Like hosteling, road tripping is a way of traveling that promotes cultural exchange.  Because of the spontaneous, wandering nature of road tripping, smalltown hostels are especially primed to benefit.

Bleisure backpacker

Are you making the most of bleisure travelers?

Have you heard of bleisure? Even though it sounds kind of “bleh,” it’s actually one of the most important trends in travel right now. Bleisure (noun) is the practice of tacking on a couple days of vacation before or after a business trip. This practice has grown 40% in only the last two years. Here in the United States, we’re up to 60% of business trips turning into bleisure and who knows how much more room there is to grow? Based on the characteristics of bleisure, it’s clear that hostels stand to gain the most from capitalizing on this travel trend. Let’s dive into some bleisure insights provided by our friends at Expedia and see what we can learn.

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Who are the bleisure travelers?

So, who are these business travelers turning a work trip into an excuse for a vacation? The majority of bleisure travelers are hostel’s core demographic, you guessed it, the millennials. If you’re a business traveller ages 22 to 35 you’re 50% more likely to make it a vacation than the middle-aged business travelers,  and four times more likely than older business travelers. Plenty of millennials prefer an Airbnb over a hostel, but here’s why when it comes to bleisure, a hostel might be their best bet: 65% of bleisure travelers are going solo. During bleisure there’s no renting a house with all your friends, not even sharing a room at the Marriott with Ted from accounting. It’s easy to see why a millennial business traveler might prefer to spend their two extra leisure days in a hostel with their new best friends than at the Ramada all alone. 

Why bleisure can be big bucks

Although it is affected by weather, bleisure is not affected by seasonality. Business travelers want some bleisure time during the offseason just as much as during the high season. Bringing in bleisure could mean filling some unsold rooms.

Another point related to occupancy: Bleisure travelers are likely to add an extra 1 or 2 nights before or after to a 2 or 3-night business trip. Because they’re here for work, they’ll keep your rooms occupied midweek when they’re there to work, before or after the weekend. For hostels that struggle with weekday occupancy, this could help.

Who can welcome the bleisure backpackers?

It’s no surprise that to benefit from bleisure, your hostel needs to be of high quality. The average bleisure traveler makes $79K, meaning if they choose a hostel, it’ll be for the experience, not the price. If your hostel is cheap and cheerful, this might not be the travel trend for you.

It definitely helps if your hostel is already receiving business travelers. 82% of bleisure travelers stay in one place for the whole trip, to avoid the hassle of switching accommodation. Before you close this tab, assuming that you’ll never lure any bleisure backpackers away from the corporate hotel down the street, know that just this month, BridgeStreet, a business travel company with more than 5 thousand corporate clients, started adding hostels to its inventory. You know that when a 20-year-old corporate travel firm is getting on the hostel bandwagon that this movement is going mainstream.

The Bleisure trend will help city hostels more than the country ones because 79% of bleisure takes place in the same destination as the business trip. If your city is already a well-known business center, pay extra attention to bleisure. 

Fears of “Trump slump” come true

The numbers:

  1. Through March 2017, total overseas travel to the U.S. has declined by 7.8 percent compared to 2016 (excludes Canada and Mexico)
  2. In 4 out of the first 7 months of 2017, international visitation contracted.
  3. Total international travel has dropped 4.2 percent (includes Canada and Mexico)
  4. US Travel Association forecasts Domestic travel to be up 1.6 percent through January
  5. Total travel volume in the U.S. is expected to grow at a rate of 1.2 percent.

Source: https://skift.com/2017/09/06/trump-slump-fears-are-realized-as-revised-findings-show-tourism-drop/

What does this mean for U.S. hostels?

The strong U.S. dollar and the unwelcoming message coming from the White House means that U.S. hostels need to increase their efforts to educate Americans on the benefits of hosteling. Hostels  may be tempted to focus efforts of foreign travelers who are already familiar with the concept of hosteling, but given that this market segment may continue to stagnate, we should look for growth opportunities from the domestic traveler market.

Some hostels also avoid serving Americans given the fear that many of them could be troublesome guests who are simply seeking cheap accommodation, who will detract from the traveler atmosphere and create problems for hostel staff. Managers should ensure that any policies that are intended to discourage anti-social behavior are carefully implemented without repelling legitimate American domestic travelers.

Questions to consider

  1. How does the blend of domestic-international travelers in your hostel compare to the blend in your local market?
  2. How is your hostel marketing to Americans?
  3. How do your check-in policies affect domestic travelers?
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