Recently Hostelworld made a presentation to investors, reviewing their performance over the last year and outlining plans for 2019. What did the presentation say? Essentially, Hostelworld’s done with big money ads with 50 Cent and Mariah Carey. Now, they’re going to use their unique content to market specifically to their target customers. Hostelworld is finished using the shotgun approach. Now they are switching to lasers. This has huge consequences for the world of hostel marketing. First let’s talk about Hostelworld’s new strategy, then discuss how your hostel will be affected.
Hostelworld is losing the OTA war. It’s a lot smaller than opponents like Expedia and Booking.com. Any hostel worker who’s seen the Extranet (Hostelworld’s back end where hostels update their availability) can see their technology is far less advanced. Hostelworld’s rivals also have a much bigger budget for marketing. In war, being smaller than your enemy doesn’t mean you always lose, but it does means you must be clever and not try to fight your larger opponent with brute force.
Hostelworld conceded that significant investments in advertising did not drive business growth. I think this was probably not surprising to any hostel owner. When Hostelworld’s released a television commercial featuring Mariah Carey, most felt this was a waste of their commission dollars. It’s nice that Hostelworld makes an effort to promote the concept of hostelling. No other Online Travel Agency makes such an effort. However, the industry is too niche for mass market advertising to be effective. A television commercial isn’t carefully aimed at a certain audience. Instead, it’s like a shotgun that sprays everywhere, hoping that some of the spray hits the target. Because hostel travelers are such a small target to hit, it wasn’t the right choice.
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Instead of big advertising campaigns, in the future Hostelworld will use data to target their customers and show them unique, relevant content. Using tools like Facebook, Instagram, and Google, Hostelworld can pick their audience, choosing viewers that are most likely to book a hostel. Then, they can send this targeted audience helpful information. They gave 3 examples:
This is a great way for Hostelworld to market to potential customers because if a person is surfing the web, researching an upcoming trip, and reads one of these articles, there’s an very high chance they’ll be looking to book a hostel. Thus, Hostelworld can carefully choose the right audience and the right message. This approach is so much smarter than a celebrity video.
The more Hostelworld focuses on the content backpackers need to plan their trips, the harder it will be to compete for the backpackers' attention. This is not a problem that is unique to our industry. The internet gets louder and louder every day and it gets harder for your voice to be heard over all the noise. However, you still have the power to compete. Here's an idea:
Who do you think is the best person to decide what to include in “The Ultimate Guide to backpacking Peru”?
There are a million resources out there that teach you how to successfully create good content and most of them are free. Nowadays most smartphones record high quality photos and videos. It’s nice if you have a five thousand dollar drone and can get aerial footage of the hostel, but it’s just not necessary so don’t let it stop you.
If you don’t have time, then get someone who does. If you have a hostel, then you have bloggers and videographers visiting you every day. Go ask your guests how many of them are taking pictures, making videos, or writing a journal or blog. If they are creating content for themselves, they could do it for you too! Just as Hostelworld isn’t the one creating the content, you don’t have to create it either.
First, you don’t have to pay people. Why not offer someone a free stay if they help you take photos or write an article? If you’re worried they’ll scam you, ask them to pay first, then refund them when the work is finished. But now, let’s talk about something more important. Even if you do not pay money to a photographer, let’s make something clear:
Right now, you are paying Hostelworld! Here's how it currently works:
Most hostel owners are comfortable with this arrangement because the hostel only pays commissions after they actually receive bookings. There is no risk for the hostel. If you don’t get any bookings, you don’t pay commissions. Paying for your hostel to do its own marketing, for example writing a blog, hiring a web designer, paying a social influencer, feels risky because you’re investing the time and money up front. “What if we pay for a cool video tour of the hostel and it doesn’t bring in any new bookings? What if we write a blog and no one reads it?” Don’t worry about this. Look at your hostel guests. See how much time they spend scrolling through Instagram, surfing the web, binge watching YouTube? If you create photos, blogs, and videos, as long as they are high quality, relevant and interesting to your customers, they will consume it.
There are hostels that invest money in marketing and they get a good return on their investment. The blog, the new website, the social influencer, they bring in more bookings overall and a higher percentage of direct bookings. Native, a hostel in a Austin, Texas with six competing hostels, lists on Hostelworld and Booking.com, and yet 75% of their bookings are direct. Take a look at their website and social media outlets and you’ll start to see why. You can see that they’ve invested time and money into their online presence, but it’s definitely paying off.
Are you willing to invest time and money too? Will your hostel take control of its marketing or are you happy just to pay the OTAs to market to travelers for you? The decision is yours. Just don’t take too long to make up your mind.
Why? Because Hostelworld sees the value in creating relevant, targeted marketing content that helps travelers decide where to book. They are finished wasting money on 50 Cent. As Hostelworld starts investing time and money into this new strategy it will only become harder to compete for the travelers’ attention.
You’re right. Hostelworld has millions of euros and you do not, but you can still beat Hostelworld. How? You just have to use lasers instead of shotguns. When you think about your hostel competing against Hostelworld, you feel like it’s pointless. You are so small in comparison to them. But how do you think Gary Morrison, the CEO of Hostelworld, feels about competing against Booking.com? Hostelworld is worth $182 million. That feels huge, until you realize that Booking.com is worth $84.6 billion. Booking.com is 466 times larger than Hostelworld! Yet somehow, Hostelworld is still quite successful in the hostel industry. You can compete against Hostelworld if you use lasers instead of shotguns. Here’s what I mean:
Hostelworld published a blog called, “The best hostels in France for any backpacker.” They are trying to get the attention of every backpacker visiting France. Even if you own a hostel in France, you are not trying to get the attention of every backpacker visiting France. If you own a hostel in Lyon, you are only trying to get the attention of backpackers visiting Lyon. If your little hostel tries to fight a battle against Hostelworld to win all the backpackers visiting France, you will certainly lose. But what if you use a laser and you try to compete only for those visiting Lyon? That’s like using a laser.
How many articles has Hostelworld written on Lyon? Zero articles. So your hostel in Lyon writes these dozen articles:
After you’re done, your website, is going to kick Hostelworld’s ass when it comes to backpackers researching Lyon. You will destroy them with lasers!
I know it’s not easy to write those dozen articles. It’s going to take some time and effort, but, everything you ever did to make your hostel a success took you time and effort. People who want to get rich quick should work on Wall Street, not open hostels. The important thing is, you are capable. You can do it.
It's very easy to get overwhelmed when thinking about digital marketing. Should you do a blog first or make some videos? Once you make the videos, how will you promote them? Should you spend money on Facebook ads or Search Engine Optimization? There's so much out there that it can make you dizzy and want to give up without even trying. Are you confused, overwhelmed, or afraid you don’t have what it takes to do this whole “content marketing” thing?
Seth Godin is a famous entrepreneur who has written many successful books. He likes to talk about "shipping." He does not mean sending a package. When Seth Godin says shipping, it means when you take your project, your blog, your video, your new website, and put it out into the world for people to see.
Every time you raise your hand, send an email, launch a product or make a suggestion, you're exposing yourself to criticism. Not just criticism, but the negative consequences that come with wasting money, annoying someone in power or making a fool of yourself. It's no wonder we're afraid to ship.
Entrepreneur, best-selling author
Nothing we do is ever perfect. There is always more work to be done or improvements to be made. If you decided to start a new hostel and did not want to open until it was perfect, you would never have a single guest. The key to success is, instead of letting the imperfections stop us from trying, we must ship as quickly as possible, and then never stop trying to improve. The same thinking applies to your hostel's marketing strategy.
I build websites and create content for hostels around the world. I can help you form a strategy for your hostel. Contact me for a free 30-minute consultation. I’d be glad to answer your questions and help you form a game plan.
Byron has worked with hostels big and small, city and rural. His first job was as a receptionist in San Francisco and his favorite was leading the events for a 500-bed hostel in Sydney. Besides all things hostel related, he enjoys motorcycle riding, especially because it's the perfect way to get from hostel to hostel!
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