How Hostelworld Works

Hostelworld.com is a great place to discover and book hostels online. It’s the largest booking site that caters to the needs of travelers who are specifically seeking hostels.

In this guide, I’ll explain how Hostelworld works.

We’ll cover the company’s background, how it makes money, how hostels pay the site, what fees guests pay, whether it’s better to book through Hostelworld or via a hostel’s own site, and the Best Price Guarantee.

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How Hostelworld.com Works

Hostelworld was founded by Ray Nolan in 1999. The company initially began as “Web Reservations International” but later changed its official name to “Hostelworld” in the early 2000s. Since then, the site has grown to over 20,000 properties in almost 180 countries. The Dublin-based company has been publicly traded on the London Stock Exchange since 2015, as Hostelworld Group PLC (symbol HSW). To read the company’s annual reports and presentations, click here.

Since acquiring two of its largest competitors (Hostelbookers.com and Hostels.com) in the past decade, Hostelworld.com cemented its position as the leader in online hostel booking. Within the travel industry, Hostelworld focuses on serving backpackers (generally age 18-35) but also other demographics - including groups, couples, elders and all nationalities.

Hostelworld.com is the first Google search result for “hostels” (after the ads) — Hostelworld.com is the 1st Google search result for “hostels”

Hostelworld’s business model is simple. Like other big online travel agencies (OTAs), the site doesn’t own the accommodation properties listed. Instead, it works as a marketplace, connecting travelers and hostels/hosts.

Hostelworld.com provides hostels with access to millions of potential customers and allows travelers to browse a wide range of properties, compare the best options and securely book and pay without leaving the site. Last-minute bookings are made easy as well, which is particularly helpful to backpackers.

Of course, all this is only possible with a transparent and trusted review and rating system. Hostelworld enables users to quickly browse and compare overall ratings, and see how a property ranks in security, staff, cleanliness, value, location, atmosphere and facilities.

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How Hostelworld Makes Money

The Hostelworld marketplace connects travelers and hostels. Hostels can reach more potential customers by leveraging the platform. Travelers/guests use the site as a one-stop-shop location, to discover, compare and book hostels quickly and securely.

Hostelworld makes money in 2 ways:

Booking Commission Fees
Featured Properties (Advertising)

Booking Commission Fees

Hostelworld earns commission each time a customer books through the site, as a “booking deposit” fee. As guests, we pay the booking deposit when we make the reservation. We’ll pay the rest of our booking total to our host when we arrive to the property for check-in.

How Commission Fees Work

Hostelworld allows properties to choose their own commission rate (between 10-25%). The rate is one of many factors (including reviews, longevity, photos, description and more) that influence a property’s rank in the search results. In their account backend, hostels can see how their property is projected to shift in rank (if at all) by increasing or decreasing commission rate.

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Are Flexible Commissions Fair?

Hostelworld’s flexible commission option stirs mixed feelings among hostel owners. In the low competition regions, hostels can maximize profits by paying a low commission rate and still rank first in search results. Conversely, hostels in competitive regions might feel the system favors hostel chains with deep pockets and brand recognition, as those companies can afford to pay high commissions and don’t rely on Hostelworld as much for their customers.

But from Hostelworld’s perspective, the system makes sense - allow flexibility for varying budgets while still incentivizing properties to pay for greater exposure. Still, it’s Hostelworld’s long-term interest to provide guests with the best experience. If commission rates become the dominant ranking factor, Hostelworld would lose credibility, and eventually, its customers.

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Featured Properties (Advertising)

Hostelworld also makes money by selling advertising space. When searching Hostelworld.com, you’ll often see the “Featured Properties” section above the search results. Properties pay Hostelworld for this exposure.

hostelworld-featured-properties-how-hostelworld-works-makes-money.png

The cost of “Featured Properties” space is determined by factors like the destination, local competition and seasonality. Only properties which have met certain standards may apply to become featured listings.

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How Hostels Pay Hostelworld

Guests’ booking deposits go directly to Hostelworld. Basically, Hostelworld is charging for the exposure and automation the site provides for both sides of the transaction (guest and host). Most hostels struggle to gain exposure without travel booking sites (OTAs).

How Hostelworld Charges Travelers

Apart from the booking deposit, Hostelworld doesn’t charge travelers/guests. Ideally, booking deposits help minimize cancellations, since guests have something invested. But if a guest cancels or does not show up, a cancellation/no-show fee is charged. To learn how cancellations work on Hostelworld, read this guide.

To learn how to pay on Hostelworld as a guest, follow this guide. Since guests’ booking deposits go directly to Hostelworld, you’ll sometimes be able to find lower prices on a hostel’s own website. Which leads us to a final, important question…

Is It Better To Book Through Hostelworld Or Through The Hostel’s Own Website?

Hostels generally operate on thin margins, so paying commissions on top of that can be difficult for them.

Each hostel determines how it plays the pricing game. Some properties inflate their prices on Hostelworld to account for the commissions, while others keep the same price in-person, on Hostelworld or on their own site. Many hostels don’t even create their own site, as most of their guests find them on OTAs or are walk-ins.

Most Hostelworld users book without comparing any prices off-site, because Hostelworld offers protection and familiarity. By booking via Hostelworld, users can manage multiple bookings with access to a customer support team, if needed. So what’s the final verdict? It’s probably smart to check a hostel’s prices on and off Hostelworld if the total booking price is important to you.

*Agoda.com sells quality, discounted hostel dorms (UP TO $50 OFF!). To see today’s hostel deals, click here.

Hostelworld’s Best Price Guarantee

Hostelworld offers a Best Price Guarantee. It works like this - if you find the same bed/room on another website at a lower price than what you paid for it on Hostelworld.com, they promise to price match.

To qualify, make sure the lower priced bed/room is:

Displayed online (offline prices don’t qualify)
Reported within 24 hours from the time you made the initial booking on Hostelworld
Includes the same booking “extras” (breakfast included, for example)

If so, you can contact Hostelworld using this form.

*Agoda.com sells quality, discounted hostel dorms (UP TO $50 OFF!). To see today’s hostel deals, click here.

Conclusion

Hopefully you found this guide helpful.

Hostelworld provides an invaluable platform, and the site facilitates smooth booking experiences for hostels and travelers alike. To learn more about Hostelworld or hostels, explore our other guides below.

Enjoy your travels!

How To Find Discounts On Hostels In Your Destination

For great deals on a wide variety of accommodation (including hostels, budget hotels, resorts, apartments, homes, guesthouses, bed and breakfasts, and unique or alternative types), use the Agoda widget below. Just input your destination and dates, then browse the results! Or to go directly to Agoda.com, click here.

Learn More About Hostelworld

Common Questions & Concerns

Get Started With Hostelworld

Post-Booking Questions

Learn About Hostels

Introduction To Hostels

Know Before You Go

Featured

Taz Zaidi [Author]

Taz Zaidi is an American travel writer and the founder/creator of TRVLGUIDES.com. Connect with him on Instagram (@tazzaidi) or on his personal website, at tazzaidi.com.

How Hostelworld Works [And Makes Money]

How Hostelworld Works

*Agoda.com sells quality, discounted hostel dorms (UP TO $50 OFF!). To see today’s hostel deals, click here.

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How Hostelworld.com Works

*Agoda.com sells quality, discounted hostel dorms (UP TO $50 OFF!). To see today’s hostel deals, click here.