What Happened to Hostels?

In the early-2000s, if you traveled overseas on a tight budget, chances are you stayed at one or more hostels. Something between a hotel and a dormitory, hostels provided an affordable lodging option for those …


In the early-2000s, if you traveled overseas on a tight budget, chances are you stayed at one or more hostels. Something between a hotel and a dormitory, hostels provided an affordable lodging option for those traveling with limited funds and resources. They were especially popular among college-age backpackers, many of whom were exploring the world for the first time.

But at some point in the last ten years or so, hostels fell out of favor. You don’t hear about them anymore, and it’s hard to find any online. They still exist, but their popularity peaked sometime around 2010.

What happened? Many people point to the popularity of the Hostel trilogy, a horror movie series that put a gory and grotesque spin on the hostel guest experience. It’s thought these movies created an unfair perception of hostels as houses of horror, scaring people away.

The truth is that most hostels did a good job scaring people away without resorting to torture and death. Instead, they failed to run a respectable business. Throw in a real-life crisis with a death count that continues to climb, and the fate of hostels was not so much a result of bad press but rather an industry-killing combination of poor management and bad luck.

Read on to understand in greater detail.

Security concerns

It didn’t take long for petty criminals to see hostels as a gold mine of fraud and theft. Guests would leave their rooms to use the bathroom and come back to find their belongings gone. Hostel owners looked to personal lockers for sale as a way to solve the problem. Unfortunately, hostel crime became so common that travelers started avoiding them. The hostel industry suffered as a consequence.

Sanitation problems

Another factor playing into the demise of hostels was their reputation for being dirty. To be fair, you get what you pay for, and nobody should expect immaculate accommodations for $25 a night, but they shouldn’t expect to get bitten by bed bugs, either. Again, it’s unfair to suggest every hostel is filthy when so many are kept clean and tidy, but as they say, one bad apple spoils the bunch.

Inconsistent experiences

As we keep saying, plenty of hostels were run with the utmost concern for guest safety and wellbeing. However, travelers had difficulty finding them while avoiding the bad ones. They might have a wonderful experience in one location and an awful one in another. That inconsistency meant many people gave up and stopped staying at hostels altogether. The result was an industry-wide dip in business, hurting the bottom line of well-run hostels along with the bad ones.

Rising costs

As hostels became more popular, demand rose, and so did prices. The biggest selling point for staying at a hostel was the low cost compared to staying at a hotel. But that once-low price kept going up. Suddenly all the downsides to hostels – mainly those mentioned above – were no longer palatable, given the price per night was nearly as much as they’d pay for a budget-friendly hotel room.

Better alternatives

It’s no coincidence that hostels fell out of favor when services like Airbnb and VRBO entered the hospitality scene. These online marketplaces made it possible for anyone anywhere to rent out a room, apartment, or entire house to those who need a place to stay on a short-term basis. Would you rather stay in your own room with a comfortable bed or sleep on an old mattress in a cramped dorm with complete strangers? If the price is nearly the same, the answer is easy.

The pandemic

Like so many other service industry sectors, hostels were hit hard during the COVID-19 pandemic. Most were shut down by order of the government, with the majority never opening again. The ones that survived the worst days of the pandemic made an effort to adapt and adjust to meet social distancing requirements. In an ironic twist, many clean and well-managed hostels pivoted to the short-term rental model made popular by Airbnb and similar services.

Where did all the hostels go? You’ll still find them in most major cities if you look hard enough. But the golden age of hostels is over, and the death blow to the industry was – for the most part – self-inflicted.

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