In 2017 Hilton’s CEO Chris Nassetta announced that they were developing a new brand for a “hostel on steroids.” Wow, the fourth largest hotel company, with 8,976 properties in the world getting into the hostel space. Can you imagine? The resources they’d have at their disposal would make Generator look like a little guest house. That would be pretty scary for hostel owners or would-be hostel owners. Sure, many backpackers enjoy staying exclusively at independent hostels but with plenty of chains like USA Hostels, Vietnam Backpackers, Mad Monkeys, and HostelOne, it’s clear there’s a huge segment of our audience that’s happy to stay with a chain, so why not Hilton Hostels? Yesterday Hilton announced their new brand, “Motto by Hilton” and although there may be steroids, there’s no hostel. Here’s what Motto is going to be about and why they dropped the S and decided to stick to doing hotels.
Motto is going to be an urban micro-hotel, with an average of 175 rooms. The rooms are going to average 14 square meters (163 square feet) and will have different room types aimed at supporting groups. At least 30% of the rooms will be able to connect with one another. There are going to be common areas for buying food and drinks and co-working. They’re also touting some pretty cool tech features like the ability to check in and out through an app, and adjust smart thermostats.
In other words, it’s a Hilton hotel with some bunk beds. Yawn.
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Stays at a hostel
Stays at a hostel
Stays at a hostel
Stays at a hotel
Hilton says “Travelers who stay in hostels, in fact, do not like rooming with strangers and often book with just their friends or family.” Does that sound accurate to you? If you’re reading this blog, my guess is that the answer is “no!” It’s clearly a huge generalization. Yes, it’s true that very few people enjoy staying in a 16-bed dormitory where the lights never turn off, the door never stays closed, and as soon as the last partyer has gone to bed, it’s time for the early birds to start rifling through their luggage. However, most hostel guests enjoy meeting people inside the room and although we’d all wish for fewer snorers and doors that are incapable of slamming, we wouldn’t wish for a hostel where everyone had a private room, because then we’d be in a hotel.
We in the hostel industry know that there’s certainly a subset of guests who travel in groups and book a whole dorm room. However, these guests typically don’t contribute much to the overall vibe of the hostel experience. Hilton says Motto’s common spaces will “spark expedition and connection by day” and are “tailored for human connection.” When you have a group of eight that have turned one of your dorms into a private room, these people do not spark any connection as Hilton intends. They generally isolate themselves and don’t participate in activities with the other guests, or worse, they act like they own the place and negatively impact the atmosphere for other guests. If Hilton wants to sway these types of guests over to Motto, most hostels will say “good riddance.” Please show me a hotel that’s as tailored for human connection as a hostel. Motto really isn’t ideal for social travelers.
For those hostels that depend on groups, these multi-purpose adjoining guest rooms might make you scared. Maybe your hostel needs these Stag parties and school groups and you don’t want to lose them to Motto. Don’t worry, you won’t, because Motto is going to be way too expensive.
Motto hotels are going to be in prime locations where travelers really want to be. That’s great. Everyone loves a good location. However, real estate is expensive in city centers. For hostels, that’s okay because we’re fitting more people into a smaller space. Motto is trying to be affordable by making the rooms small, an average of 14 square meters (163 sq ft). The problem is that isn’t enough. No matter how small you make a private room, it’s still not as cost effective as a dorm. Motto won’t be able to compete on price with hostels. We don’t know how much Motto will cost, but here’s what we do know:
The first Motto will open in London. If you’re six friends or a family, you can stay at the 8.0-rated Thameside YHA. Your group will have a 6-bed dorm to yourself, with a private bathroom for 79 pounds sterling ($102 USD). Your room will feel more spacious than a Motto room, with 73 square meters reserved just for you and your friends. The hostel is next to a tube stop and there’s a cafe-bar serving snacks and alcoholic drinks. Sounds great!
Meanwhile, if your group needed a hotel, you’d need two adjoining rooms. With the same budget of only 79 quid, you’ll be staying 8 kilometers (5 miles) out of the city center in a neighborhood described as “dodgy” at a hotel rated a lousy 5.0, where soap is not included in the bathrooms. Easy choice, right? You can be sure that any price sensitive group will be choosing a hostel over a Motto.
So, when you stack Motto up against hostels, it fails on price and on social. Are there any other ways it can stand out?
Nothing against lavender but it doesn't sound worth it.
So why did Hilton chicken out and decide to stay out of the hostel sector? First, it looks like they did their homework.
“Hilton evaluated the emerging lifestyle hostel model globally to understand the opportunity to enhance the shared room concept. But, extensive research showed that travelers who stay in hostels, in fact, do not like rooming with strangers and often book just with their friends or family. They want more from their hostel experience but are limited by current options in the market."
Hilton looked at hostels around the world and decided that what backpackers really want is “more.” What “more” is Motto going to give them? More grab-and-go sandwiches?
I think the real reason they decided to stay away from the shared room concept is that running a hostel is different and hoteliers don’t know how to do it.
“With what hostels stand for, we just didn’t feel comfortable about planting our flag in there,” says Tripp McLaughlin, global head of Motto by Hilton.
What do hostels stand for besides diversity and inclusion? Hilton would love to get in on that, but it's communal living that makes them uncomfortable. Hilton’s good at cleaning a hotel room once the guest has checked out, but could Hilton ever tell you how to effectively clean a six-bed dorm when 4 people check out and 2 are still in the room? Hilton manages millions of reservations every day, but would they know that sometimes you could allocate a female from a mixed dorm into a female dorm in order to create better availability for new bookings? Hilton’s very good at keeping guests happy but what would they say to a guest who had a snoring person in their dorm?
Hilton could have followed Accor’s example and built one hostel property, using it to learn enough about the shenanigans that only happen in a hostel before opening more properties. Instead, they’ve decided to play it safe and stick to what they’re good at: building hotels, and that’s what investors want: playing it safe. They’ve already got seven Mottos in the pipeline. And why shouldn’t they? Motto is just another Hilton, but with less space and more buzzwords. “A hotel brand connected to each city like the mantra that defines it. It’s called ‘Motto.”
I think we’ll stick with hostels.
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. Today he's a Market Manager at Cloudbeds. 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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