Assignment 6 Essay

Submitted By tanhan93
Words: 705
Pages: 3

Assignment #6
Unique Industry Segments
Since assignment #6 asked to look at some of the sub-categories of the lodging industry, I have decided to look into the “hostel” market. I chose this due to the fact that I have been traveling around the world and have therefore been staying at different hostels. In this paper I will answer these following questions:
What market would be interested in such a product?
What would the rate range be for such a product during high season?
Do I believe this would be a more (or less) profitable enterprise than a traditional hotel operation-based upon some of the industry statistics we have discussed in class?
Furthermore, I will explain my experience staying at different hostels around the world – and why I choose staying at hostels instead of hotels.

What market would be interested in such a product?
It is a well-known fact that hostels are a cheaper version of a hotel. You share a room with 4 other people (this differ from hostel to hostel), you do not have a bathroom for yourself and the standard is, well, questionable. On all of the hostels I have been staying at is crowded with students, backpackers and young people just passing by. So the primary market for hostels are youths, students and people needing a stay for the night – but they are not willing to pay a fortune. According to Jo-Anne Hecht and David Martin (2006) 20 percent of all tourism worldwide comes from the youth and student market. Furthermore, they state that the hostel market generate $8 billion revenue annually. Looking at these numbers, one can tell that the hostel/backpacking market is popular to youths – and therefore I believe that this is a great substitute to hotels.

What would the rate range be for the hostel/backpacking market during high season?
The high season depends on where the hostel is placed. If you go to a hostel in Norway – the high season will be during the summer (June-August) since that is when the weather is at its best. However, if you go to Australia – the high season will probably be during the winter (June-August) since during the summer (November-February) the weather is too hot and tourists will probably not have the best time. Looking at the website of Civic Guesthouse in Australia (, which I stayed at for 1 month, one can see that their prices do not change dramatically. However, they have different rooms (double room, shared room etc.), which differ in prices. This is the case at most of hostels around the world – where you can pay extra for a single room,