The Points & Miles Backpacker: Why the US Hasn't Embraced Hostels

For at least the 15 years of my backpacking career, it has been a hot topic of conversation in hostels across Europe, South America, Asia and Oceania: why aren't hostels popular in the US?

The Stigma of Shared Accommodation

There is a stigma that shared accommodation is only for young travelers who can't afford their own room — that after your days at university in dorms or Greek houses, or maybe after a couple post-graduation backpacking trips, you should no longer be sleeping in a room with people you don't know.

I've debunked this before, but many people — especially luxury travelers — continue to scoff at the idea of shared accommodation. But premium travelers use shared accommodation all the time!

Consider this: the Jazz Hostel in Lake Bled, Slovenia. This room can be shared comfortably by six people, with communal bathrooms and showers.

Meanwhile, Thai Airways' first class cabin, in the nose of a 747, is occupied by nine people with shared bathrooms and no shower.

Obviously, I'm aware that for most travelers, there isn't a realistic alternative when flying, while on the ground, private rooms are ubiquitous.

But the fact is we all use shared accommodation, at least sometimes.

Challenges in the United States

While I don't see any of these as insurmountable, the US does have some unique challenges that make hostels — and backpacking, in general — less popular.

It's a Big Country

The sheer size of this country make it less conducive to the backpacker life. And with far fewer transportation options and a frankly inferior bus and rail network, especially compared to Europe, "backpacking across the US" is much more of a logistical challenge.

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An Unwelcoming Market

Hosteling began in Europe over a century ago and has grown with the cities there. Hostels entering the US market now have less prime real estate and more red tape than abroad, and compared to the well established hotel industry.

New York City has been especially unwelcoming to hostels. A bill in 2010 shuttered almost every hostel in the city, but they have begun to slowly reemerge.

Current State of Hostels in the US

Most major US cities have hostels, and some of them are really thriving. New York City has the most hostel options by far. Other popular destinations such as Miami, Los Angeles, San Diego, San Francisco, New Orleans, Washington, DC and Chicago also have several options, but the scene is a far cry from what you'd find in Europe.

For example, Chicago has nine hostels listed on Hostelworld, compared to 37 hostels in Munich, even though Chicago has nearly seven times the number of annual tourists (55 million versus 8 million in 2017).

Existing US hostels tend to fall into three categories:

Hostelling International USA

This nonprofit organization started as a place for students to sleep while on school trips, and the character of these hostels simply hasn't evolved much since. There are over 50 locations in the US, but most, well, still feel like dormitories.

Independent Hostels

I've stayed in some great hostels in the US that seem to have been created after a couple friends had a great backpacking trip abroad and said, "Let's open a hostel back home!" But despite local success in several cities, these small, private business ventures rarely have the means or desire to expand.

New "Poshtels"

A few new brands are opening high class hostels, or "poshtels," in US cities. Freehand Hotels, for example, are stylish boutique properties with a social, hostel-like vibe, an affordable price point and both shared as well as private accommodations (except in New York City). After originally opening in Miami the brand has steadily spread to Chicago, New York City and Los Angeles.

Life House is new to the scene but could quickly take the lead in this movement. The hotel collection is debuting with two hotels in Miami in December, and expects to have 20 US properties in development by the end of 2019. Life House properties will, in the future, rent individual beds in select rooms, but the option isn't yet available.

And Generator Hostels, a high end hostel chain with 13 locations in Europe, opened its first US location in Miami this summer and has plans to expand across North America. They have also talked about a licensing model, which would allow for rapid expansion.

Hotel Chains are Lagging

Major hotel brands in the US have been slow to develop properties that target stylish but budget-conscious travelers. Marriott has Moxy, which actually takes jabs at traditional hotels in its marketing. The brand's global director, Vicky Poulos, described Moxy as "a boutique hotel that has the social heart of a hostel."

And just last month, Hilton announced its new brand, Motto, which Hilton CEO Chris Nassetta initially billed as a "hostel on steroids." The first property won't welcome guests until 2019.

Despite referencing hostels, neither Moxy nor Motto offer shared accommodation. In its Motto press release, Hilton said: "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."

I personally disagree, although I haven't seen Hilton's "extensive research," and my stance is based off personal and secondhand experience (though lots of it). But the statement also fails to consider solo travelers which make up a large percentage of hostel patrons.

My theory is that hotel chain executives don't yet have a chart they can point to in a board room that says, "shared accommodation can be popular and profitable." So they'll stick to selling hotel rooms as usual, but with different styles, sizes and price tags.

The Opportunity for Hostels in the US

There are plenty of people, including many TPG readers, who have never tried shared accommodation (on land) and have no interest in it. But the opportunity is there without them. Hostels abroad are filled with foreign and American travelers, and there's no reason these travelers wouldn't opt for shared accommodation in the US, too.

That's partially because the demographic of hostel guests is expanding. When I started backpacking, you didn't see many people over 30 in a hostel. Now, 30-year-old hostel guests are common.

As a result, hostels have matured, too. Sure, cheap party hostels still cater to 19-year-olds looking to drink their way across the world. But classier hostels attract travelers willing to spend a bit more for greater comfort. Hostels can range in quality the same way hotels can range from the Mandarin Oriental New York to a La Quinta Inn Manhattan.

(Image courtesy of Freehand Chicago.)

Plus, every year welcomes a new class of college graduates: a new group of young, single travelers with, for the first time, extra income. So, hostels don't have to convert established travelers who have grown accustomed to private rooms. They simply have to appeal to a new generation of travelers. And the price of a bed compared to the price of a room will certainly help persuade them.

Although the big hotel chains are refraining, Freehand, Generator and Life House are investing significantly in shared accommodation in the US. It's possible that, for the first time, hostel-like stays could become a popular and pervasive presence in the US.

Price, however, is the ultimate factor. No matter how small they make a hotel room or how many bunk beds they add, hoteliers will have to work hard to deliver rates consistent with European hostels. There is an entire contingent of backpackers, solo travelers and longterm travelers who would prefer the savings to the solitude.

The Points & Miles Backpacker is a weekly column appearing every Monday. TPG Contributor Brian Biros, who has backpacked the globe for the past 15 years, discusses how to fund this adventurous, budgeted and increasingly popular form of travel with points and miles. He'll also explore all things backpacking-related. Read his story here and his high-level approach here.

If you're looking to back that pack up and get some guidance, send your questions to backpacker@thepointsguy.com !