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Many of those who have been managing hostels for years feel that the world of hostelling has changed.

Whether due to the pandemic or to the consolidation in the market of other accommodation models such as Airbnb, glamping or coliving, the hostel as a model has been transforming, and from BananaDesk we decided to go out and ask the hostel community how they are experiencing it.

So we started a series of interviews with various hostel leaders in Latin America to begin to establish an overview of the situation.

By the way, if you are in charge of a hostel and you are interested in appearing in the next round of interviews, please write to me through the contact form.

Three questions

To keep things simple, we wanted to focus on three general questions:

1. How do you see the situation of hostelling in 2024 (post-pandemic)?
2. What is the main challenge you feel the hostel (as a model) currently has?
3. Can you share some insights on how you have been able to move forward with these challenges?

The idea is to explore visions and experiences from different places in different countries.

Let's start.

1. How do you see the situation of hostelling in 2024 (post-pandemic)?

Starting in northern Latin America, Alexandra & Francesca from Casa Pancha (boutique hostel in Mexico City) told us that the situation is still very good after the post pandemic surge. In particular, they believe that hostels are well positioned to take advantage of the fact that tourism has changed towards experiences, because people know that they can die (due to the pandemic) and so they prefer to live more experiences.

Clare, from Casa Daikiri (ecohostel in Puerto Escondido, in southern Mexico) feels that the situation is good, because people are wanting to be more conscious of how they travel, and that benefits them because they have an Ecohostel.

Paula from Straw Hat (also in Puerto Escondido) thinks something similar: she says that tourism continues to grow in Mexico: this new Straw Hat location is just starting under her management, after having worked in Tulum.

From Merida, in the middle of the Yucatan Peninsula (Mexico), Andrea told us that Casa Garza (Hostel Boutique) opened just in pandemic and is doing very well. They particularly took advantage of the fact that there was more tourism in Mexico because there were not so many restrictions during the pandemic (there were in other places).

In contrast, Shaun from Tribe on the Beach Hostel in Playa del Carmen (México) told us that a few months ago the situation wasn’t good there mainly due to 2 issues: the elections in both USA and Mexico and hurricane Beryl caused a real market crash. He does not know how the hostels in the city survived.

Those causes caused the Mexican peso to weaken and made people come back to the region: Mexicans are not going abroad as much and foreigners can now go back to get better prices.

They have now had a few weeks of full occupancy although they have kept prices low because “empty beds don't pay the bills”. Before the pandemic, hostels could fill their seasonal beds 6 months in advance. But the Playa del Carmen market has dropped from 8 million to about 2.5 million.

Already entering South America, Duvis of Hostel La Antigua Cápsula (in Cartagena, Colombia) says that the situation is very difficult in Cartagena right now. He has had a hostel since 2017, which was always at 100% occupancy until the pandemic. It had picked up a bit in 2022 but now it is very complicated. He also mentioned the increase in Airbnb type spaces as a problem.

Ricardo García, from Hostel Metro Floresta (from Medellin, Colombia) also described the situation there as one of transition: there was a sharp increase in tourism after the relaxation of restrictions due to the pandemic (everyone wanted to travel) but that also generated an increase in competition that was reflected in the growth of the number of accommodations in general, and Airbnbs (temporary rentals) in particular, which decreased the hostel's bookings. This is a situation that is still developing.

Even further south, in beautiful Valparaíso (Chile), Jano from the Casaclub Hostel (open since 2007!) told us that Chile is recovering very slowly after the “estallido” (2019) and the pandemic. Particularly in Valparaíso it has been difficult because there are many alarming communications about certain situations (e.g. burning of forests near the city) and this reduces tourism. He believes that in Chile there is still not much knowledge of the hostel concept, which is more developed in Argentina and Europe.

Kassandra from Hostal Providencia (in Santiago, Chile) also commented that because of the political situation before the pandemic, tourism was very affected. Then with all the Covid, it took them many years to reactivate. Last year they began to see that the arrival of guests was more stable. Mainly Brazilians, but also, lately, Argentines.

Finally, Pablo Molteni from Achalay Hostel (Bariloche, Argentina) told us that hostels are in a very difficult situation due to the political / economic crisis in Argentina, as he has never experienced since 2010 when he started the hostel. Basically he is putting money out of his pocket when it should be the opposite: being in the middle of high season and having one of the hostels with more history and positioning in the most tourist-developed place in Argentina (Bariloche). In addition to the economic crisis, inflation has made Argentina particularly expensive, for example in the cost of airfare to Bariloche.

He described a situation that he sees in general: the lack of strategic work in most hostels. He feels that many people are dedicated to keeping the hostel in good condition (e.g. maintenance) instead of thinking strategically and working on leading the business. He calls it putting on the “business suit”.

Note: the answers to the 2 final questions were grouped together to make sense of the definition of the challenges and the proposal to move forward in addressing them.

2. What is the main challenge you feel the hostel (as a model) currently faces?

3. Can you share some ideas on how you have been able to move forward with these challenges?

According to Alexandra & Francesca (Casa Pancha) it is the Vacation Rental model like Airbnb. They see a tendency for some of the guests to use the hostel to get to the place, get to know it a little, and then move to private apartments. (This is something they are also trying to take advantage of by investing in their own Vacation Rental). Also, stays are not as long as they used to be.

As an answer, they say that it is necessary to generate activities inside the hostel, so that it becomes a unique experience. This is incomparable with Airbnb where there is nothing but furniture, but they also see that Airbnb is promoting experiences.

Clare (Daikiri House) mentions the rising cost of living as a challenge in making the hostel sustainable. She proposes local job development as an answer to the challenge of sustainability for both the hostel and the community.

Differentiation was highlighted by Paula (Straw Hat / Puerto Escondido MEX). As demand grows, so does supply (competition), so they have to be concerned about attracting people in different ways.

To this end, it is promoting several initiatives:

• Social networks (they have a single account with the Straw Hat brand).
  They work hard to show what they do.
• Participating in the local community
  In addition to being connected through WhatsApp with other hostels and local businesses, they organize activities and share information with other places.
• Hostelworld Linkups
  To highlight from the activities they do.

Andrea (Casa Garza) told us that the hostel as a model is very new in Mexico, so many nationals have not yet tried it as an alternative, and there is usually a difference in expectations. She says that it is necessary to tell people what a hostel really is, so that people become clear about this different proposal.

Shaun (Tribe on the Beach) pointed to profitability. He says that Hostelworld has lowered its positioning and is having trouble getting bookings, which puts him in trouble by trying to lower prices but avoiding getting into more trouble, but obviously he is not getting what he wants.

Duvis (Hostel La Antigua Cápsula) referred to the same thing from another angle: the challenge is to make the business profitable. He has a lot of fixed expenses (rent, services, employees) and the fluctuation of income does not help.

To counteract this, she is working on several ideas:

• Full house, renting the whole place for large groups.
• TikTok, promoting campaigns with the idea of the concrete offer, that is, not to talk about the place or indirect things but to make a concrete offer in each post.

Ricardo García (Hostel Metro Floresta / Medellin COL) says that the big challenge is the differentiation with Airbnb and other types of accommodation that don’t share the characteristics of the hostel: getting to know the local culture and sharing with people from different backgrounds. He believes that the characteristics of the hostel must be highlighted, counteracting the specific actions of Airbnb that promote isolation of those who travel.

To address the challenge, it’s carrying out certain activities that allow those who pass through the hostel to take away a unique and unforgettable experience:

• Promoting the informal association with other hostels in the area, which facilitates the use of activities by guests of all organized hostels, and also the coordination for any other issue.
• Promoting interaction between guests by introducing each person who arrives to all the people who occupy the hostel, and also the entry into a Whatsapp group of the hostel. This makes interaction easier during the rest of the stay.
• Conducting tours of the city focusing on different historical and cultural features of Medellin.
• Making agreements with service providers such as a dance academy, where guests can learn to dance.

From Valparaíso in Chile, Jano (Casaclub Hostel) mentioned that the challenge is to connect with the new generations, because he believes that young people can connect with the hostel model naturally (which they do not know much about today). In his case he already receives people who come back with family and/or children, and that shows that the hostel is a place to share.

Kassandra (Hostal Providencia / Santiago de Chile) also mentioned Airbnb. She pointed out that it is a very strong and unregulated competitor that has grown a lot in the last few years in Santiago. They have no choice but to join the platform and offer their services there.

To differentiate themselves from those who offer houses/apartments on Airbnb (owners with 2nd properties that only rent spaces) they direct much of their efforts to differentiate themselves with the quality of the hostel's services:

• Forming a stable and trained team that knows the type of guest that arrives in each season and their needs. Although sometimes there are volunteer receptionists, they attach great importance to a stable team that knows how to solve problems, not just attend to the reception.
• Complementary services: gym, co-working spaces. All these implementations arose from dealing with the client and being able to detect needs, especially with digital nomads (post pandemic).
• The human touch - reviews are very important - leaving aside any kind of artificial intelligence, they prefer the contact and the relationship with their customers.

Pablo Molteni (Achalay Hostel / Bariloche, Argentina) defined two main issues:

• Spreading the hostel model
  Many people still do not know what a hostel is (as a different type of accommodation), so only those who know it as something different arrive. There is still an idea that the hostel is “guitar and beer”, but the hostel is sharing, and it can be with people from other cultures or with family.
• Professionalizing the service
  The hostel suffers a lot from economic variations because it is generally a business that operates with a low level of profit and cannot easily scale. Many people who manage hostels do not think strategically about many aspects of the hostel as a business, for example by not being in charge of seeing possibilities to consolidate sustainability (it is difficult for them to delegate).

Up to this point, what has been said about each hostel in particular. In the different interviews, many related topics came up: the situation of the big sales channels such as Booking or Hostelworld, the new channels such as HostelHop, the hostel chains, accommodation models such as coliving, and many more.

We will develop each topic if we find out that you are really interested in them, let me know by writing from the BananaDesk contact form.

See you next time!