2024 data:
A year in review

After the Omicron wave in early 2022, global occupancy began to stabilize, following similar patterns through 2024. Interestingly, in 2023 and 2024, we saw the occupancy index for dorms grow, while private rooms dropped. This could indicate travelers’ increased confidence to share spaces, foregoing private rooms for shared dorms.

While dorms are still experiencing an uptick in demand, we expect growth to remain moderate in 2025, although with significant regional variances. Globally, the strength of demand depends on several unpredictable factors, including:

• Fluctuations in inflation and its impact on travel spending
• The revival of Chinese outbound tourism
• The trajectory of geopolitical conflicts in Ukraine and the Middle East
• The strength of the U.S. dollar
• The impact of the second Trump administration on global travel policies

Unlike in previous years, hostelers cannot rely on organic market growth to drive occupancy in 2025. Instead, they must focus on capturing market share through targeted strategies like leveling up dynamic pricing, developing experience-driven offerings, and attracting new traveler segments.

Occupancy pace – the rate at which rooms are booked on future dates – offers insights into booking trends and demand patterns. Data from 2022 to 2024 shows that bookings were strongest in 2023 (due to “revenge travel”), but that otherwise, pace remained consistent across the three years. 

The pattern shows a steady increase in bookings 190 to 60 days prior to arrival, followed by a sharp acceleration from 30 to 10 days out, and a final surge in the last 10 days. In 2024, for example, hostel occupancy grew by 22 percentage points in the 10 days immediately prior to arrival.

By monitoring occupancy pace, hostels can strategically increase rates during periods of high demand and proactively adjust marketing efforts to boost bookings during slow pickup periods.

Online travel agencies (OTAs) captured 74% of bookings for hostels in 2024, a 1% increase from 2023. When compared to our main Lodging Report, hostels had a much higher reliance on OTAs compared to independent hotels (61%).

While OTAs remain a vital channel for visibility and bookings, an overreliance on them can erode profitability due to high commission fees. To attract the right audiences while maximizing direct bookings, hostels should focus on providing a seamless direct booking experience while maintaining a balanced distribution strategy, expanding their presence on mainstream and niche OTAs.

Tracking how far in advance guests book helps hostels improve forecasting and optimize pricing strategies. In 2024, average booking windows varied dramatically by country. 

The shortest windows were in Mexico (17.3 days) and Australia (17.4 days), whereas the longest were in Argentina (33.4 days) and the United Kingdom (28.4 days).

Longer booking windows give hostels more time to anticipate demand fluctuations, allowing them to raise rates in high-demand periods and launch campaigns to boost slower periods. To encourage advanced bookings, hostels can offer early-bird incentives, target segments that book further ahead, and avoid over-discounting last-minute stays.

After years of rapid growth, global ADR for dorms declined by 1.7%, and privates declined by 4% in 2024, reflecting softening demand and increased price sensitivity. Accounting for global inflation at 5.4% in 2024, the real ADR decline is even steeper.

Looking ahead, headline inflation is forecasted to drop to 3.3% in 2025, yet room rates are projected to increase by only 2.6% globally in 2025, meaning hostels will again see a decline in real revenue.

To offset the impacts of inflation, hostels need to devise strategies to grow ADR above market levels. This includes refining segmentation and pricing strategies, investing in direct bookings, and enhancing perceived value through premium experiences, value-added packages, and reputation management.