Hostels Global Market Opportunities and Strategies to 2034

This report describes and explains the hostels market and covers 2019-2024, termed the historic period, and 2024-2029, 2034F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global hostels market reached a value of nearly $5.1 billion in 2024, having grown at a compound annual growth rate (CAGR) of 6.56% since 2019. The market is expected to grow from $5.1 billion in 2024 to $8.77 billion in 2029 at a rate of 11.47%. The market is then expected to grow at a CAGR of 11.00% from 2029 and reach $14.79 billion in 2034.

Growth in the historic period resulted from the rise of solo travel, increasing tourism, rising student migration for education and increasing number of budget-conscious travelers. Factors that negatively affected growth in the historic period were seasonal demand fluctuations and limited amenities for long-stay or business travelers.

Going forward, the increasing popularity of digital nomads (remote workers), growth of international travelers, rising popularity of digital booking platforms and government and tourism board initiatives will drive the growth. Factor that could hinder the growth of the hostels market in the future include perception of low quality or hygiene, competition from budget hotels and short-term rentals and impact of trade wars and tariffs.

Asia Pacific was the largest region in the hostels market, accounting for 36.55% or $1.86 billion of the total in 2024. It was followed by North America, Western Europe and then the other regions. Going forward, the fastest-growing regions in the hostels market will be Asia Pacific and Middle East where growth will be at CAGRs of 14.60% and 13.50% respectively. These will be followed by Africa and Western Europe where the markets are expected to grow at CAGRs of 13.16% and 12.55% respectively.

The global hostels market is fragmented, with a large number of small players operating in the market. The top ten competitors in the market made up to 9.13% of the total market in 2024. A&O Hotels and Hostels. was the largest competitor with a 2.04% share of the market, followed by Selina Hostels & Hotels with 1.89%, YHA England & Wales with 0.86%, Nomads World Hotels Pty. Ltd. with 0.79%, Mad Monkey Hostels with 0.71%, Hostelling International (HI) with 0.68%, Safestay Plc with 0.61%, Meininger Hotels with 0.58%, Che Lagarto with 0.50% and Generator Hostels Ltd. with 0.47%.

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 48.84% or $2.49 billion of the total in 2024. Going forward, the mid-range segment is expected to be the fastest growing segment in the hostels market segmented by price point, at a CAGR of 12.81% during 2024-2029.

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 78.92% or $4.02 billion of the total in 2024. Going forward, the workers segment is expected to be the fastest growing segment in the hostels market segmented by type, at a CAGR of 12.44% during 2024-2029.

The hostels market is segmented by booking into online bookings, direct bookings and other mode of booking. The other mode of booking market was the largest segment of the hostels market segmented by booking, accounting for 48.53% or $2.47 billion of the total in 2024. Going forward, the online bookings segment is expected to be the fastest growing segment in the hostels market segmented by booking, at a CAGR of 15.52% during 2024-2029.

The top opportunities in the hostels markets segmented by price point will arise in the mid-range segment, which will gain $1.53 billion of global annual sales by 2029. The top opportunities in the hostels markets segmented by type will arise in the students segment, which will gain $2.83 billion of global annual sales by 2029. The top opportunities in the hostels markets segmented by booking will arise in the direct booking segment, which will gain $1.76 billion of global annual sales by 2029. The hostels market size will gain the most in China at $996.68 million.

Market-trend-based strategies for the hostels market include developing innovative hostel brands to enhance guest experiences, developing large-scale, tech-enabled accommodations through public-private partnerships, strategic partnerships to deliver innovative services with enabling tech use, such as property management services, renovating to develop vibrant, experience-driven spaces that cater to the evolving preferences of modern travelers and strategic investments.

Player-adopted strategies in the hostels market include focus on expanding their business capabilities through hostel expansions and acquisitions.

To take advantage of the opportunities, the analyst recommends the hostels market companies to focus on innovative, experience-driven hostel brands, focus on large-scale, tech-enabled hostel developments through public-private partnerships, focus on renovating hostels to create experience-driven spaces, focus on strategic investments to expand and upgrade operations, focus on mid-range hostels for accelerated growth, focus on worker hostels for rapid market expansion, focus on online booking channels for accelerated growth, expand in emerging markets, focus on strategic partnerships and technology integration, focus on competitive and value-based pricing strategies, focus on digital and partnership-driven promotion, focus on personalized and content-driven promotion and focus on customer-centric staffing and service strategies.

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