According to Questex Hospitality Investor, a research conducted on the global hostel market predicts that this segment could expand up to USD 7.65 billion by 2027. Luke Knowles, the director of strategy and development at Beds & Bars Group, a British group operating hostels in 8 European countries, states that the hostel business has been very profitable, especially after Covid. The segment is still highly underdeveloped. Chains account for 10% of the total hostel beds in Europe, but the majority of hostels are small and managed by individual owners who may not necessarily utilize all the available space. Beds & Bars Group manages over 20 hostels in the UK and Western Europe, with approximately 4,500 beds and a turnover of around GBP 65 million.
The group operates under four brands: St Christopher’s Inns and Flying Pig for accommodations, and Belushi’s and Interpub for F&B offerings. Knowles highlights how, due to their lower price point, the hostel segment is a market that withstands socio-economic crises: St Christopher’s Inn properties quickly returned to 90% occupancy after reopening following the pandemic. The hostel market operates differently from hotels: investments are not considered per key but per bed. Instead of focusing on RevPAR, since most hostels have more than one or two beds per room, the group focuses on “revenue per available bed.” Beds & Bars’ expansion plans focus on European countries such as France, Spain, Germany, Italy, and the Netherlands, while continuing their expansion in the UK.