The hospitality industry has been buzzing lately with a new breed of boutique mid-range hotels and hostels cropping up, targeting Millennials with stylish spaces at affordable prices. But don’t turn your noses up just yet upon hearing the word “hostel.” Brands such as Generator are ensuring these hostels aren’t your typical backpacker joints.
“Our aim is to revolutionize the hostel experience, from the customers to the industry,” says Carl Michel, executive chairman at Generator. “Generator sells affordable beds but in stylish, design-led spaces in central locations in the most exciting European cities. We want to change the industry’s understanding of hostels and be at the forefront of a new concept: the design hostel.”
In less than three years, Generator has expanded its brand from two to 10 hostels located in the center of major cities throughout Europe, making it the world’s fastest-growing hostel brand. Since the company’s re-branding in 2012, Generator has set up shop in Barcelona, Berlin, Copenhagen, Dublin, Hamburg, London and Venice. A second hostel even opened last month in the uber-trendy Mitte neighborhood in Berlin, a city that is gaining popularity among the Millennials set for its youthful atmosphere and nightlife scene.
“We have created a more contemporary brand image, which allows us to act and communicate like the market leader we are becoming. However, the rebranding is not just a mere image change, it means even better service, a wide range of food and drink, and an exciting program of social events,” Michel points out.
Menus at the hostels typically feature locally inspired dishes and the public spaces bring a sense of community, with local art exhibits, live music and DJs keeping guests entertained.
Take Generator Berlin Mitte for instance. The hostel offers everything a young traveler may look for—complimentary WiFi; a 24/7 lounge; rental bikes; a ping pong table in the alfresco courtyard; a hopping social calendar; and a Bohemian charm with artwork on the walls by Berlin Wall street artist Thierry Noir—all just steps from the boutiques and bars in the old Jewish quarter of Berlin.
What does this mean for agents? It’s your chance to rein in the millennial crowd and keep them for life, arranging stays in hostels throughout Europe that capture the design aesthetic and price point these travelers look for. The best part? While travelers can snag a cheap dorm bed, they can also opt for a private room, or even a penthouse suite at Generator Barcelona, with a private terrace overlooking La Sagrada Familia (how many other hostels can say they offer that?).
“Generator is differentiating itself from the traditional notions of hostels, which were often quite basic. Generator is a cool alternative means of staying somewhere that offers a great place to meet other people; to discover the culture of the city; and be in the heart of things,” Michel says.
Generator’s target clientele is travelers between the ages of 18 and 30, but Michel says they have been seeing an increase in demand from people who are 30 and up. “Our audience is in-tune with the ‘contemporary design at affordable prices’ message we convey, and enjoy interacting with new people when they travel,” he says.
Next year, Generator will open its doors in Rome, within walking distance of the Colosseum, and in Paris, which will be its largest location offering 950 beds. Opening late-2014, Generator Paris will feature dorms, private rooms and luxury penthouse apartments, set in the 10th Arrondissement in the up-and-coming Canal Saint-Martin neighborhood. The neighborhood’s vibe and Paris’ culture will come into play with the hostel’s overall design, as well as in its cafe lounge and nightclub bar. Oh, and the designer’s past clients just happen to include Soho House and the trendy MOMOFUKU restaurant. Not your typical hostel by any stretch of the imagination.
With over $200 million invested by Patron Capital, which backs Generator, the brand plans on continuing this rapid expansion, aiming to have 15 locations by 2015 with a total of 8,000 to 10,000 beds, and bring the brand to the U.S. with a property in New York City.
“Our wide range of events and exceptional service adds to the experience and makes the formula very successful. There was definitely a gap in the market that we are filling with our design-led hostels,” Michel says.
Agents can find Generator on the GDS and although Generator does not currently offer a traditional commission structure, Generator does offer for direct inquiries a rate that the agent can mark up accordingly. Rack rates at Generator Berlin Mitte start at $14 pp for a dorm and $25 pp dbl for a private room. Rack rates at Generator’s properties in Paris and Rome will start at $16 pp for a dorm and $33 pp dbl for a private room. Rack rates for the Penthouse Suite at Generator Barcelona start at $547 per night including VAT and breakfast.
