Hostel chain targets new generation of backpackers

LONDON (Reuters) – A European hostel chain that offers youngsters the chance to stay in quirky buildings and events such as DJ sessions plans to double in size to 28 sites within five years, aiming to cater for the latest generation of backpackers.

Generator Hostels, a private-equity-backed chain, said its hostels were 96 percent full this summer despite security fears after terrorist attacks in Europe and Britain’s vote to leave the European Union – issues that have dampened demand at traditional hotel groups.

Hotels are also facing a growing challenge from home-sharing service Airbnb. But Generator, where the average guest is aged 20 to 21, says the social aspect of its hostels set them apart.

“Airbnb seems to be the biggest story in the world right now, and I think it is for the traditional lodging sector if you have a more commoditized guest-room experience, versus what we offer, which is an extreme social engagement,” CEO Fredrick Korallus told Reuters in an interview.

Generator targets Instagram and Snapchat users who share photos of its sites. The group’s hostel in London is a former police station, while in Amsterdam the former auditorium of a university building serves as a quirky bar.

While Generator still needed to compete with Airbnb, its bigger rival was shifting onto different ground, Euromonitor travel analyst Wouter Geerts said.