6 trends shaping the
travel landscape

The trends included in this year’s report include a resurgence in lagging market segments, an uptick in inflation-busting travel hacks, and new spins on experiential travel. We also anticipate continued growth in the short-term rental sector (despite rumors to the contrary), new efficiencies driven by generative AI, and growing demand for new skills among next-generation hostelers. 

The experience IS the destination

According to the old adage, it’s about the journey, not the destination, but in 2024, it’s all about the experience. After years of post-pandemic binge-buying, consumers are moving on from collecting stuff to collecting experiences. Here are three standout trends we’re observing.

Tour tourism

In 2023, world tours by Taylor Swift and Beyoncé demonstrated the power of tour tourism, bringing hotels and hostels significant bumps in revenue wherever they touched down. Hostels can expect an encore in 2024, with more shows from Tay Tay as well as Coldplay, Madonna, Pink, and other headliners hitting the global tour circuit. Almost 70% of travelers say they are more likely than ever to travel to a concert outside their hometown, according to Expedia. 

Memorable meals

This year, travelers are showing an insatiable appetite for culinary tourism. According to Skyscanner, 47% of U.S. travelers have booked a destination purely to visit a specific restaurant. For some, this may be experiencing Noma in Copenhagen, reputedly the world’s best restaurant, before it closes at year-end. For others, it may be heading to steamed dumpling stalls in Nepal, produce markets in Vietnam, or Cajun food trucks in New Orleans. 

Splashy trips

After last year’s record-breaking temperatures, more people will retreat to water destinations this year. But this is about more than lounging on floaties in the pool. Activities on the roster include wild swims with dolphins in Mauritius, eco-diving among the mangrove forests in Yucatan, winter swims in Norway and Estonia, and island-hopping by front crawl in the Adriatic.

What does this mean for independent hostelers?

To tap into the experience trend, hostels should promote their proximity to popular activities, whether it’s a concert venue, popular restaurant, or unique attraction. Nearly two-thirds of travelers say they often or always book their accomodation based on access to local experiences, according to Hilton.

By signing up for notifications of upcoming concerts, sporting events, and festivals, hostelers will receive a heads-up to raise rates and implement stay restrictions when demand is expected to spike. Properties can also utilize business intelligence and revenue management systems integrated with their PMS to track events and update rates in real time. 

Hostels should also define the experience that they provide themselves. Kash Bhattacharya, who runs the Budget Traveller website, said to National Geographic, “The mark of a great hostel is when the staff and the owner give you the keys to the city. Experience is king – from impromptu city tours, in-house cooking lessons, or insider recommendations.” See what you can offer to make your hostel a destination within itself.  

Inflation who? Travelers trade up

Inflation is heavy on the minds of consumers these days. Nevertheless, surveys indicate that people are unwilling to sacrifice travel or compromise on their tastes. Instead, they’re finding creative ways to trade up travel experiences.

Aspirational luxury

To experience a richer lifestyle on the road than at home, travelers are employing money-saving hacks such as traveling off-peak, during the week, and closer to home. Some are choosing destinations where the cost of living is relatively low, whereas others are buying a day pass or enjoying drinks at a luxury hotel (and posting proof on Instagram) while staying at a more affordable property.

Close enough: The quest for dupes

Popularized on TikTok, a dupe refers to a more affordable alternative to a popular but pricey product. Not only are dupe destinations less expensive, they also tend to be less crowded and less predictable. For travelers, this might mean choosing Quebec City over Paris or Liverpool over London. Already, one in three travelers has booked a dupe, according to Expedia. 

Postponing the payment, not the trip

“Buy Now, Pay Later” (BNPL) is the fastest-growing form of payment in the U.S. In travel, service providers like Affirm and Afterpay have partnered with Booking.com, Expedia, Airbnb, and select hostel companies to offer BNPL options, and the list is growing fast. In a survey from Atmosphere Research, four in 10 travelers said that a BNPL option had made it possible for them to take a trip. 

What does this mean for independent hostelers?

With travelers seeking luxury on a budget in 2024, hostels are uniquely positioned to capitalize on this demand. One of the fastest-growing segments of the hostel market is the luxury sector. Artful Living says these high-end outposts defy stereotypes about cheap travel and offer an opportunity to indulge in plush hotel perks for lower hostel prices. 

Hostels can choose to capitalize on this growing segment of travelers looking for low-cost, high-value accommodations through renovations, upgrades, and new amenities. These guests will be willing to pay more than your average budget traveler, but beware of the vibe you want to maintain at your property, as this will impact what services and activities guests will appreciate.

Often, it’s the little extras and thoughtful touches that guests remember most, especially when on a tight budget. Throwing in value adds such as walking tours, free parking, welcome drinks, or coworking spaces can wow guests without costing the hostel a lot of money. Additionally, offering a BNPL option will attract more bookings, especially if the economy slows down.

The comeback: Straggling segments catch up

Since the pandemic, leisure demand has been so strong it has been easy to overlook other market segments that have been slower to rebound. However, with growth in leisure travel now at a virtual standstill, all bets are on a triple threat of market segments picking up the slack: international, corporate, and group travel. 

Here come the big spenders

In 2023, international tourism reached almost 90% of pre-pandemic levels, setting the stage for a full recovery in 2024. Inbound tourists tend to stay longer and spend as much as 90% more than domestic travelers, according to Aoife Roche of STR, speaking at Cloudbeds’ inaugural Passport UserCon. She also noted that strong demand from Asia Pacific is likely to fill any gaps in other regions. 

Back to business travel

After stalling and sputtering in recent years, global business travel is forecasted to zoom past pre-pandemic spending levels in 2024. Some of the recovery will be fueled by rate growth, whereas travel volume may still lag behind 2019 numbers. China is expected to lead the charge, reclaiming its position as the No. 1 outbound business travel market in the world. 

The more the merrier

Group travel made strong strides in 2023, and the momentum is anticipated to continue through 2024. This includes not only conference travel and small regional meetings but also team-building events, social groups, and group trips to sporting events like the Olympic Games in Paris. However, groups might not hit their usual haunts. Many conferences and events have shifted from large, urban cities to smaller, secondary markets, according to Hilton.

What does this mean for independent hostelers?

Chasing demand is about finding new business opportunities, and these market segments offer valuable ways to strengthen hostel performance. International travelers are generally less price-sensitive than domestic travelers, and they tend to stick around for a while. As our data indicates, more business travelers are working remotely and combining leisure activities on trips, increasing the average length of stay. And groups often book well in advance, providing a solid base upon which to build higher-rated business. 

2024 will present an excellent opportunity for hostels to take advantage of the group business boom. Events like Stay Wyse and WYSTC can connect hostelers with groups to help build long-term relationships. Additionally, partnerships with travel agencies, tour operators, and educational institutions will be crucial in attracting group business.

Hostels that cater to diverse market segments enjoy stronger year-round demand and are better positioned to weather a softening in one or more segments. In 2024, think of ways you can appeal to these segments by offering comfortable coworking spaces, spacious kitchens, group rates, long-term stay discounts, and more. 

Generative AI: Trusted travel advisor and 24/7 intern

2023 was the year generative artificial intelligence (AI) went mainstream. Since launching in late 2022, ChatGPT has amassed more than 180 million users worldwide. Not to be outdone, Google launched Gemini in December, an AI chatbot that comprehends and generates not only text but also audio, video, and images.

What’s truly exciting about AI chatbots is their potential as a trusted travel advisor, providing personalized information and recommendations on everything from flight routes to accommodation choices based on the traveler’s budget and preferences, as well as acting as a translator, tour guide, and concierge. For example, Navan has launched Hotel Concierge by Ava, an automated virtual assistant that provides recommendations tailored to the traveler’s individual preferences and booking patterns. 

However, one of the most significant impacts of AI is perhaps its potential to revolutionize the operational efficiency of hotels and hostels. Technological advancements have democratized access to AI tools, with forward-thinking tech providers creating innovative products with advanced AI and machine learning. This shift is fostering a new era where hostel operators, regardless of size, can harness AI to streamline operations and accelerate efficiencies. 

In 2024, we can expect AI to be meaningfully integrated into technology solutions to improve day-to-day operations for lodging businesses. From guest communication to revenue management and digital marketing, hostelers will be able to use AI to enhance productivity and automate workflows, leaving more time for strategic decision-making. 

What does this mean for independent hostelers?

Airbnbust? Long-term obstacles for short-term rentals 

After substantial growth during the pandemic, the short-term rentals (STR) sector is experiencing serious pushback. Is this the beginning of the end?

Traditionally, a major draw for private rentals has been value: more space for less money. However, the pricing gap with hotels has narrowed, and travelers have been grumbling about misleading pricing tactics. Airbnb, in particular, has been assailed for advertising low prices only to produce sticker shock when fees are tacked on at checkout. 

At the same time, governments have been cracking down on STR operators, capping the number of licenses issued and the number of days properties can be rented out per year. New York City is the latest city to throw down the gauntlet, with strict new regulations that bar hosts from renting out an entire home and require them to be present during the guests’ stay. 

As a result of all this activity, whispers of an apocalyptic “Airbnbust” have spread online. Upon closer inspection, however, it appears that reports of the death of short-term rentals have been greatly exaggerated. 

While some secondary markets have experienced a glut in supply, overall demand has increased, while hotel rates climbed faster than rental rates last year. Reporting last year on the company’s most profitable third quarter in history, CEO Brian Chesky remarked, “I think we’re only scratching the surface.” The company also introduced transparency measures to display the total price, including fees, at the beginning of listings. 

What does this mean for independent hostelers?

Adapt or go obsolete: Next-gen hostelers upgrade their skills

The nature of hospitality is changing, and a driving force is technology. Travelers are using more technology to plan trips and experience destinations, and hostelers are using more technology to operate their properties and serve their guests. 

Today, technology automates an increasing array of tasks for hostel employees, from taking reservations, to updating rates and availability, to checking guests in and out. While humans are still running the show, roles and responsibilities are evolving. From front desk staff to general managers, the challenge today is to find one’s place in a tech-centric world. 

Growing demand for diverse skills

The irony of it all? The range of skills required of hostel staff has expanded, not contracted. Technology doesn’t replace the skills employees have always needed to be successful – hard skills like technical aptitude and soft skills like empathy, creativity, and teamwork. But it also demands an array of new skills.

Today’s hospitality leaders must be more technical, able to operate dozens of applications used in the hostel environment today. They must be more analytical, able to extract meaning and insights from massive amounts of data. And they must be more strategic, finding the ideal balance between technology and human touch that keeps guests and teams happy and loyal. 

There is also increasing demand for knowledge and skills in emerging tech fields such as generative AI, cloud computing, robotics, cybersecurity, internet of things, and virtual reality. 

What does this mean for independent hostelers?

It’s time to rewrite the rules

When travel behavior shifts, hostelers must change how they do business if they wish to stay competitive. In 2024, this means letting go of old habits and embracing new ways of doing things – in marketing, revenue management, operations, guest experience, and across the organization. 

The backbone of a successful hospitality business is modern technology. No longer can independent hostelers allow themselves to be held back by manual processes and outdated software while competitors down the street leverage the speed and efficiency of automation and cloud technology. 

Nor can hostelers rely on continued guest satisfaction and loyalty without unified data to understand and cater to guest preferences. To stay competitive, hostels need an integrated hospitality platform that is built to serve their unique needs and is scalable as their business grows and evolves.

Over the past decade, Cloudbeds has evolved from a scrappy startup to an industry leader by rewriting the rules. Today, we encourage our hostel partners to follow a similar path. More than ever, our team is committed to providing best-of-class technology to empower hostelers to chase demand and elevate their businesses through the art of hospitality.