EyeforTravel takes a look at how Hostelworld has continued to boost investments in technology to meet the needs of travellers ditching the 9-5. We also throw in a free video of a Hostelworld presentation
Right on timing, products and prices – that is Hostelworld’s story. Numbers in its latest survey, out in mid-July, on US travel shows the trends going its way. More and more are “saying goodbye to the 9-5 grind in favour of a more flexible work environment” it found, freeing them to travel. Since US citizens between the age of 18 and 29 are most likely to consider working remotely while travelling, the key age group for hostelling, it all looks good! As Hostelworld commented: the Digital Nomad Tribe is growing!
To help the travellers, Hostelworld has continued to boost its investment in technology with a very data-driven strategy, adding a new feature (in May) to its IOS and Android app called ‘Speak the World’. It instantly translates up to 43 languages, including Bengali, Hindi and Thai, as well as the more predictable English, Spanish and French. Powered by Google Cloud Translate Technology, it takes just a few seconds.
Breffni Horgan, Hostelworld’s Head of Product, said at the launch that the aim was to “empower travellers to go even further off the beaten track”. This new technology would “help tackle the language barrier in a fun way”.
The approach to apps
Hostelworld’s strategy is to use its mobile app to add to its customer base, describing its aim as building a community. “Our customers are highly mobile and look for experiences, not souvenirs: they’re also very sociable, want to live as locals do and meet the world.”
Last year it added new mobile app features through its partnership with Gogobot to create a customised experience for travellers called “My Trips”. This delivers travellers relevant information about what to see and do in their destination from the moment they book their hostel. For example, if a traveller booked a hostel in Sydney the app shows the weather in Sydney, things to do, attractions, places to eat etc.
That was followed this year by an app experience called Hostel Noticeboard, located in ‘My Trips’, which is a digital replica of the traditional on-the-wall hostel notice board. This shows the different types of social events happening in hostels 24/7 and around the world. Ultimately, the idea is that Noticeboard will allow a hostel operator to communicate with a guest in a way they have not before and for guests to communicate with each other.
As Breffni Horgan told the EyeforTravel European conference in May, hostels are different to other accommodation in that they are designed to bring people together and ‘Hostel Noticeboard further encourages this’.
Not only, it is hoped, will these apps increase Hostelworld’s business, but it helps differentiate the product from competitors such as Priceline’s Bookings.com. As the analysts at Ellerston Global Investments point out, despite being the second biggest player in hostels, Bookings.com has “not been innovating at the same pace”. After all, hostels are only 1-2 per cent of its revenues.
“Approximately, two thirds of global hostel revenue is generated via online channels, with circa 70% of all online hostel bookings made via an online travel agent (OTA) such as Hostelworld or Booking.com,” Ellerston Global points out. “With a 40% market share, Hostelworld is the long-established market leader in a niche market that has been growing and consolidating.”
“In a mobile first and social second world, Hostelworld has already built the platform, brand name and user base and is now entering the next stage of its lifecycle. The company is optimising its platform via mobile and developing applications that create a social network, marketplace and communication tool for hostel travellers that will further widen the moat around its platform.”
It seems to be working – last year bookings at core brand Hostelworld increased by 18% to 6.2 million. It now has 36,000 properties, of which 14,000 are hostels. Average commission rate earned was 13.8%, up from 13.1% the previous year. It is, Hostelworld says, “comfortable with expectations of eight per cent growth”.