For those who were unable to attend this year's Hostelworld conference, do not worry—those of us who did don’t remember much either! Even considering the wholehearted collaborative attempt and failure to drink the Guinness factory out of supply, many of us did not miss a beat when it came to the information shared. Lucky for you, I was one of those who stayed alert, and I will do my best to give you my high-level take on what the conference was really about. Now, I've been to many conferences. Fortunately for me, it was part of my employment contract when I first started at Apple Hostels in Philadelphia, where the owners saw value in sending me. My first was in 2009. I’ve skipped a year here and there, but this was my fifth conference and my first where everyone left totally content and on the same page. Here's why.
Hostelworld Self-Discovery
Hostelworld's float/IPO could be the best thing to happen to them. Now they have shifted their attention from making their investors happy to making their shareholders happy. It seems like a huge weight has been lifted off their shoulders, allowing them to look up at the big picture, not just the snapshots their investors wanted them to focus on (which was most likely to get acquired by one of the big fish: Priceline, Expedia, Tripadvisor). This is not to say that an acquisition is off the table; it could happen years down the line when Hostelworld proves its value, growing the company and influencing the industry. They are now able to focus on enhancing their value, which is the service they provide to both their customers and their partners. Through this value, they will play a major role in influencing their industry. Yes, they have to answer to those shareholders, but now there is a clear measure of their success: as they develop more value, their stock prices will increase as well. Over the past year and a half to two years, as the possibility of floating became more and more the best option for them, they looked internally at how they could improve the company and become something the general public would want to invest in. They restructured teams, added key players such as Otto, their CMO, redesigned the sites, the brand, the logos, and more. This trend continues today, and it is evident that they have a stronger sense of self and their core mission—something that couldn’t have been said before. [embed width="640" height="360"]https://www.youtube.com/watch?v=lEFmygH6mvY\[/embed\]
Securing their Spot
Now that they have found themselves, they can properly see how they fit into the bigger picture of online travel overall. This is the first time I've seen Hostelworld really securing their position like this. Since Otto joined the team, he has slowly taken on the role of the outward face of Hostelworld to their industry peers. Feargal has been doing a great job, but the organization realized the executive team needed to grow so that each member could focus on their strengths to expand the company. With this new structure, they can attend more industry events and network with the right people. They've been participating in industry-wide conferences and forums held by leaders such as Phocuswright and Skift, securing partnerships like the one with GoGoBot and finding mentors/advisors such as their newly formed relationship with Carl Shepherd from HomeAway. The results of these efforts were evident at this year’s conference, leaving clues to the exciting times ahead for the company.
A Much Needed Confidence Boost
Not only did they attend the Phocuswright conference and represent the hostel industry, but they also commissioned a Phocuswright report on the hostel industry and the hostel traveler, which doesn’t come cheap. Phocuswright is one of the industry leaders in producing such reports, so it was a natural fit. Douglas Quinby, the man behind the research, took the stage to provide us with high-level snapshots of the report's results, covering the nature of the industry and its customers. He is probably still sifting through the data to draw conclusions. They asked the right questions and gathered data that now helps tie into Hostelworld’s new overall goal: to focus on hostels and grow the "pie" of hostel guests. This comes as a huge relief considering past efforts that alienated some partners who felt Hostelworld was, and I'm paraphrasing from Rucksack Brian, a serial HOSCAR winner and Hostelmanagement.com team member, "(Paying Google to) intercept guests who would find us otherwise, and charge us to receive that guest." The Phocuswright report has shown that the hostel guest is a remarkably unique customer, worlds apart from those of hotels. It has highlighted how the sharing economy has shed new light on the industry and opened it up to much more opportunity in underrepresented markets. Hostelworld will use its new marketing talent to seize that opportunity and increase the number of guests overall. In the past, they added hotels, Hostelbookers even included campsites—just about anything other than hostels—but now they are focusing on you. Hostels are their core, and with the insights from this report, Hostelworld has vowed to return to its core competency, which is great for the industry overall. Usually, Phocuswright charges heavily for their reports, but rumor has it that a fairly detailed report will be available for free, compliments of Hostelworld. It will contain valuable information to help us refine our strategies as well as give their shareholders confidence in their leadership and direction. Of course, all reports like this should be taken with a grain of salt, but overall, it will have a strong impact on the industry.
The Focus is on You
Now that Hostelworld really knows what they want, they have been building a strategy to achieve it. They realize their customers are spending their money on hostels, so they will do their best to get them to spend more and stay at more hostels, building awareness and experiences to help the hostel scene grow overall. They have most likely implemented measures to track success and are raising the expectations of their accounts team to really drive this home. They have spoken happily about a new CRM, which will help them identify opportunities for growth, allowing them to measure performance and use that data to improve next time around. They have tons of data, and now they are using it wisely, with the right tools and the right teams. I wouldn’t be surprised if you receive a call or email from your account manager out of the blue to discuss strategy and "the market" more than ever before. Of course, they can only provide broad, benchmarked data and insights, but this will be significant in helping you manage expectations and increase overall revenue.
On a sidenote: Hostelworld truly understands its role as a marketplace, focusing on both its customers and the hostels themselves. Otto championed the importance of nurturing relationships and even showed up at the unofficial afterparty at Coppers, being there early in the AM. Now, that is dedication.
They also invited us to participate in their viral marketing strategy. They are offering the opportunity to propose new challenges to your guests that will boost their brand and raise awareness of the hostel experience overall. Think about something you've always wanted your guests to do that was out of their budget range. Consider their "Skydive Skye Your Parents" video. What would you have your guests do that was crazy, if Hostelworld would pay for it? Reach out and get it done! [embed]https://www.youtube.com/watch?v=cHm0DpSuo5U\[/embed\] The reason? Hostelworld needs to build the brand around the experience rather than just the bed. The unique value proposition of the entire industry lies in the experiences and connections hostellers make with others as they travel. The Phocuswright report even mentions that there is an ocean of alternative options for our guests, such as Airbnb, campsites, couchsurfing, and even hotels (yes, major hotel brands are building and catering to our guests), to name a few. All of these options are coming after the same guests that we are, and both we and Hostelworld need to capture that experience and get our guests hooked—addicted to hostelling like the latest drug. It seems to have already begun. The rise of professional hostellers and the yuppie hosteller with disposable income shows that regardless of income, their needs might change over time, but the experience remains in high demand. Many hostels are adapting to meet those changing needs to keep them coming back for years to come. Other topics touched on were the basics of revenue management, the significance of ancillary revenue, and how to fend off petty competition. Overall, the Hostelworld Conference was, as the Irish would say, "Grand." They always put on a good time, but it's time to get serious. Carl Shepherd stressed how fragmented the industry is, and it is clear it will only become more fragmented. The industry is maturing, and it is becoming increasingly difficult for the "long tail*" hostels to adapt. You must sell the experience, share your knowledge with your peers, and do your best to grow, and Hostelworld promises to do just about the same. It may sound like I am sucking up to Hostelworld, but I am merely reflecting the sentiment I felt overall, and many others felt the same. May there be many more conferences like it to come. We need a rematch—another opportunity to take on the Guinness challenge one more time.