According to a report by Altus Market Research titled, “Hostels Global Market 2022 Opportunities and Strategies to 2031 Including: By Price Point: (Economy; Mid-Range; Luxury); By Type: (Students; Workers); By Booking: Online Bookings; Direct Bookings”, the global hostels market reached a value of nearly $5,741.3 million in 2021, having grown at a compound annual growth rate (CAGR) of 1.5% since 2016. The market is expected to grow from $5,741.3 million in 2021 to $7,278.7 million in 2026 at a rate of 4.9%. The market is then expected to grow at a CAGR of 5.5% from 2026 and reach $9,502.8 million in 2031.
The hostels market is highly fragmented, with a large number players in the market. The top ten competitors in the market made up to 2.06% of the total market in 2021. The hostels market is highly competitive due to presence of small and local players operating in local geographies in the market. A&O Hotels and Hostels was the largest competitor with 0.50% share of the market, followed by Che Lagarto with 0.47%, St Christopher’s Inns with 0.29%, Vietnam Backpacker Hostels with 0.19%, Loki Hostels with 0.13%, goSTOPS with 0.12%, Mad Monkey Hostels with 0.12%, Bohemian Hostels with 0.10%, Hostelling International Canada with 0.09%, and Safestay Plc Holding S.L. with 0.06%.
Growth in the historic period resulted from strong economic growth in emerging markets, growth in world population, a rise in disposable income, acceptance of solo travel and an increase in paid leaves globally. Going forward, millennial travelers, rising spend on leisure, shift in travel trends, the resurgence of staycations, government initiatives, increasing internet penetration and smartphone usage and an increase in budget-conscious travelers will drive the growth. Factors that could hinder the growth of the hostels market in the future include communal lodging Issues and the Russian-Ukrainian war.
The hostels market is segmented by type into students, workers and other types. The students market was the largest segment of the hostels market segmented by type, accounting for 79.1% of the total in 2021. Going forward, the workers market is expected to be the fastest growing segment in the hostels market segmented by type, at a CAGR of 5.2% during 2021-2026.
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The hostels market is segmented mode of booking into online bookings, direct bookings and other booking modes. The other booking modes market was the largest segment of the hostels market segmented by mode of booking, accounting for 48.6% of the total in 2021. Going forward, the online bookings market is expected to be the fastest growing segment in the hostels market segmented by mode of booking, at a CAGR of 5.7% during 2021-2026.
The hostels market is segmented by price point into economy, mid-range and luxury. The economy market was the largest segment of the hostels market segmented by price point, accounting for 50.3% of the total in 2021. Going forward, the luxury market is expected to be the fastest growing segment in the hostels market segmented by price point, at a CAGR of 5.4% during 2021-2026.
Asia-Pacific was the largest region in the hostels market, accounting for 36.9% of the total in 2021. It was followed by North America, and then the other regions. Going forward, the fastest-growing regions in the hostels market will be Africa, and, Middle East where growth will be at CAGRs of 7.7% and 6.6% respectively. These will be followed by South America, and, Western Europe, where the markets are expected to grow at CAGRs of 6.4% and 5.4% respectively.
The top opportunities in the hostels market segmented by type will arise in the students segment, which will gain $1,194.2 million of global annual sales by 2026. The top opportunities in segment by price point will arise in the economy segment, which will gain $697.7 million of global annual sales by 2026. The top opportunities in segment by mode of booking will arise in the direct bookings segment, which will gain $719.3 million of global annual sales by 2026. The hostels market size will gain the most in the USA at $299.6 million.
Market-trend-based strategies for the hostels market include focusing on hybrid hostels, focusing on eco-friendly hostel pattern, focusing on yoga hostels providing health benefits, leveraging digital technology in their hotel management systems and adopting artificial intelligence technology for higher engagement.
Player-adopted strategies in the hostels market include focus on strategic acquisitions to expand hostel business and focus on strengthening business through expansions.
To take advantage of the opportunities, Altus Market Research recommends the hostels companies to focus on hybrid hostels, invest in eco-friendly hostels, introduce innovative hostel concepts, expand in emerging markets, provide competitively priced offerings, leverage social media, use artificial intelligence (AI) to increase customer engagement and increase focus on online consumers.
