Hostel vs Hotel

April 12, 2024

The hostel industry in the United States has been growing steadily over the past decade. A bed in a shared dorm room costs somewhere around $40 to $90 per night in major cities. A hotel room in the same neighborhood might run $170 or more. The price gap is obvious. What takes longer to understand is why someone would choose one over the other.

Hotels offer private rooms with their own bathrooms. Hostels put six or eight strangers in the same room with bunk beds. The trade-off seems simple enough on paper.

The Room Situation

Most hostels operate on a dormitory model. Guests pay for a single bed in a shared room. The beds are usually bunks. Some places have curtains around each bunk for privacy. Others don’t.

Bathrooms are shared. A hallway might have three shower stalls and two toilets for twenty people. Morning rush hour can be a problem.

Marcus Chen manages a hostel in Austin, Texas. He opened the place in 2019 after spending four years backpacking through Southeast Asia and Europe. “People who’ve never stayed in a hostel imagine the worst,” he told me when I visited last March. “They picture dirty sheets and loud parties every night. Some places are like that. Most aren’t.”

His hostel has four-bed and eight-bed dorms. The four-bed rooms go for $52 a night. The eight-bed rooms are $38. A private room with a shared bathroom costs $89.

Hotels work differently. You book a room. The room is yours. Nobody else sleeps there unless you brought them. The bathroom is yours. The television remote is yours. Room service exists.

The average hotel room in the U.S. cost about $167 per night in October 2023, according to a survey by Cheaphotels.org that looked at 50 cities. Boston was the most expensive at $303. Portland, Oregon was the cheapest at $102. New York sat at $288.

Communal Kitchens

Hostels usually have a shared kitchen. Hotel rooms do not.

This matters more than it might seem. A week of restaurant meals in a city like New York adds up fast. The kitchen lets people cook pasta or eggs or whatever they bought at the grocery store.

The kitchen also functions as a social space. People end up talking while they wait for water to boil. Travel plans get shared. Tips get exchanged. Friendships sometimes form.

A woman who stayed at HI NYC Hostel left a review saying she spent $33 a night after tax. She mentioned the kitchen specifically. “I ate breakfast there every morning,” she wrote. “Saved a fortune.”

Chen’s hostel in Austin has a kitchen with four burner stoves, two refrigerators, a microwave, and a coffee maker that runs 24 hours. He said guests leave behind food all the time. Rice, oil, spices, half-used jars of peanut butter. The hostel puts it in a free bin for whoever wants it.

“I’ve watched people make entire dinners from stuff other guests left behind,” he said.

Hotels sometimes have a mini fridge in the room. Rarely a microwave. A full kitchen almost never. Extended-stay hotels are the exception.

Meeting People

Hostels attract solo travelers. Roughly 55% of hostel guests worldwide are backpackers or solo travelers, according to a 2023 market report.

The social aspect is part of the product. Common rooms, shared tables, group activities. Some hostels organize pub crawls. Others run walking tours. HI NYC Hostel in Manhattan offers a different event every night. Bar tours, clubbing trips, comedy shows.

Chen runs a weekly barbecue at his Austin location. Free for guests. “It started because I had an extra bag of charcoal,” he said. “Now it’s the thing people mention most in reviews.”

Hotels are private by design. Guests pass each other in hallways. Maybe nod. Rarely talk. The lobby bar exists but operates under different social rules than a hostel common room.

A 65-year-old man posted on a travel forum about his hostel experiences in Germany and Austria. “Hotel bars and lobbies have become rather sterile and uninviting to me,” he wrote. “Hostel common areas are full of people and energy.”

Who Stays Where

The hostel guest profile has changed over the years. Twenty years ago it was almost entirely young backpackers in their early twenties. Budget was the only consideration.

Now the age range has stretched. Chen said his oldest guest last year was 71. A retired professor from Michigan traveling alone.

“People in their thirties, forties, even fifties show up now,” he said. “They’re not broke college kids. They just don’t want to spend $200 a night on a hotel room they’ll only use for sleeping.”

Private rooms in hostels have become more common. Some hostels now offer rooms that look more or less like budget hotel rooms, just attached to a hostel’s common spaces. The Freehand chain does this. So does Generator.

Hotels still dominate the market. The global hostel industry was valued at about $7.21 billion in 2023. That sounds like a lot until you compare it to the hotel industry, which runs into the hundreds of billions.

The Downsides

Hostels have problems that hotels don’t.

Sleep disruption is the main one. Someone comes back at 2 a.m. Someone else’s alarm goes off at 6. The person in the next bunk snores. Plastic mattress covers crinkle.

Theft happens occasionally. Lockers exist but not all hostels provide them. Not all guests use them.

A hostel owner in an industry survey mentioned bed bugs as a persistent issue. “We couldn’t get rid of them for weeks,” they said. “The exterminators came three times.”

Cleanliness varies. A hostel with great reviews might have a spotless bathroom. A hostel with okay reviews might not.

Hotels have their own problems. Hidden fees. Resort charges. Parking costs. But nobody is going to rustle around your room at midnight looking for their phone charger.

Making the Choice

Price is the obvious factor. Someone on a tight budget who needs a place to sleep will pick the hostel.

The social factor matters more than some people expect. Solo travelers who pick hotels sometimes find themselves lonely after a few days of not talking to anyone. The hostel provides built-in social infrastructure.

Privacy goes the other way. Couples usually want a hotel. So do people who work remotely and need quiet space for video calls. So do light sleepers.

Chen said about a third of his guests have stayed in hostels before and know what they’re getting into. The rest are first-timers who saw the price and decided to try it.

“Some love it and come back,” he said. “Some hate it and never come back. Both reactions are fine.”

The hostel market is expected to reach somewhere around $11 billion by 2030, according to industry projections. Growth has been steady. Not explosive. The U.S. market in particular remains smaller than Europe or Australia in terms of hostel density.

A traveler deciding between the two should probably try both at some point. The experience of each is different enough that reading about them only goes so far.