Hostel Market Size, Share and Growth Analysis Report - Forecast Trends and Outlook (2025-2034)

The global hostel market size reached around USD 5.32 Billion in 2024. The market is projected to grow at a CAGR of 10.80% between 2025 and 2034 to reach nearly USD 14.84 Billion by 2034.

Global Hostel Market Growth

In 2023, the global occupancy index for hostels reached 110, recording a significant growth from year-on-year growth from 104 in 2022. The steady increase in the demand for dormitory rooms and private accommodation has led to an increase in the hostel market value. In 2023, the average daily rate (ADR) index of hostels increased by 27% from 2019 levels, reaching 127. Globally, hostels’ RevPAR (revenue per available room) index reached 117, and RevPAB (revenue per available bed) index reached 125, which indicated the rising appeal for shared spaces among travellers. This is favouring the establishment of family room accommodations across budget-friendly travel destinations, such as Laos and Mexico.

As per the market report, online travel agencies have dominated the hostel booking landscape. In 2020, they accounted for around 60% of all hostel bookings worldwide. This number surged to 70% in 2023, with direct channels accounting for just 30% of all bookings generated. Online travel agencies account for most of the hostel bookings in Europe (73%), followed by the Asia Pacific (64%), and Latin America (56%). This is prompting small travel agencies to create mobile-friendly websites with SEO-based content to attract more travellers towards them, which is expected to contribute to growth of the hostel market over the forecast period.

Key Trends and Developments

Increase in travel rates; rise of collaborative consumption; technological advancements; and increase in demand for sustainable offerings are factors favouring the hostel market growth.

October 2024

Green Tortoise launched cozy private rooms along the vibrant location of North Beach in San Francisco to cater to the growing demand for immersive cultural experiences from tourists.

September 2024

The Hosteller, an upcoming hostel chain in India, raised around INR 32 crore in Series A round of funding led by V3 Ventures to expand its existing network of hotels to over 150 locations by 2026. This is expected to favour the hostel market development in the Asia Pacific.

November 2023

Generator Hostels ltd. completed a refinancing debt agreement worth EUR 750 million to retain its existing valuable assets. This was done in partnership with its existing and new investors across Europe and the United States.

September 2023

An increasing number of cost-conscious millennials and Gen Z travellers led to a 30% increase in the earnings of Generator Hostels ltd. amidst the cost-of-living crisis. This also increased the hostel market revenue.

Increase in travel rates

Though the demand for hostels has traditionally remained the strongest in Europe; Hostelworld, a leading global travel agency reported a substantial surge in bookings for Egypt (+106%), Guatemala (87%), Turkey (67%), and Mexico (55%). The increasing shift towards solo travel is also expected to positively impact the hostel market outlook over the forecast period.

Rise of collaborative consumption

By enabling users to share resources and establish personal connections, the sharing economy has led to the emergence of a culture of collaborative consumption. This has led to an increased demand for shared accommodation spaces, including hostels.

Technological advancements

As per hostel market analysis, online booking platforms have revolutionised the experience of accommodation booking by accepting digital payments and confirming online room bookings, thereby ensuring a hassle-free travel experience.

Increasing interest in sustainable offerings

This trend can be attributed to increasing environmental consciousness among consumers, which is prompting major companies to establish climate-neutral hostels.

Global Hostel Market Trends

The Hostels World Group suggests that 65% of hostelers across the United States, the United Kingdom, and Australia, prefer staying in eco-friendly accommodation spaces. As per the market analysis, alternative accommodation spaces such as hostels emit 75% less carbon dioxide emissions, which has increased their appeal among the youth travellers and millennials. This is expected to drive the hostel market expansion over the forecast period.

Global Hostel Industry Segmentation

The EMR’s report titled “Global Hostel Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Market Breakup by Accommodation:

• Private Room
• Sharing Room
• Family Room
• Others

Market Breakup by Booking Channel:

• Online Booking
• In-person Booking

Market Breakup by Tourist:

• Domestic
• International

Market Breakup by Consumer Orientation:

• Men
• Women
• Children

Market Breakup by Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

Global Hostel Market Share

Based on region, the market is segmented into North America, Europe, the Asia Pacific, Latin America, and the Middle East and Africa. Over the forecast period, the Asia Pacific is expected to grow at a CAGR of 12.1% due to the increasing tourist footfall in the region. As per the market analysis, a major hotel booking platform of India reported a 24% increase in the demand for alternative accommodation options such as hostels. The demand for apartments/hostels under INR 2,500 has also surged significantly, leading to further market expansion.

Leading Companies in the Global Hostel Market

Major players are expanding their range of premium accommodation options while ensuring cost-effectiveness of existing offerings to capture a greater hostel market share.

London Backpackers

London Backpackers was founded in 2004 and is headquartered in London, United Kingdom. It provides large/small booking accommodations for tourists and students wishing to explore London.

The Green Tortoise

The Green Tortoise was founded in 1974 and is headquartered in California, United States. It provides adventurous bus tours across Alaska, Mexico, and the Central America region. According to hostel market analysis, it also operates 2 full-service hostels in Seattle and San Francisco.

WOMBATS Holding GmbH

WOMBATS Holding GmbH was founded in 1999 and is headquartered in Vienna, Austria. It is a hospitality company that operates around 5 hostels Vienna, London, Budapest, and Munich (Germany).

Generator Hostels ltd.

Generator Hostels ltd. was founded in 1995 and is headquartered in London, United Kingdom. It offers a range of unique, sociable, and affordable accommodation services across 16 different destinations in the United States and Europe.

Other players included in the hostel market report are Hostelling Internationa, Safestay PLC, goSTOPS Hospitality Pvt. Ltd., a&o hostels Marketing GmbH, GRUPO VAN BARON Y BUSH SL, Onefam Hostels, among others.
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