Hostel Marketing 101: 4 Tips for Success

I love to travel, so the opportunity to work on more travel and hospitality-specific marketing content has been a real treat. One thing I have not done yet, however, is stay in a hostel. And before you wave the idea off, hostels have come a long way since the 1970s AND not every hostel is like Eli Roth’s movie. That said, our awesome Target Marketing Group intern, Jaclyn, HAS experience with hostels and suggested a piece on them. How could I say no?

Travel DogeI love to travel, so the opportunity to work on more travel and hospitality-specific marketing content has been a real treat. I’ve met some cool people, attended a great conference focused on NY travel and helped put together a virtual panel dedicated to travel marketing in the Internet Age, hosted by one of those really cool people I met (Hint, it’s Kae Lani Kennedy and she’s seriously awesome.)

One thing I have not done yet, however, is stay in a hostel. And before you wave the idea off, hostels have come a long way since the 1970s AND not every hostel is like Eli Roth’s movie. That said, our awesome Target Marketing Group intern, Jaclyn, HAS experience with hostels and suggested a piece on them. How could I say no? So here she is, rocking your minds with four ways you can improve the marketing of your hostel.


Hostel Meme
Honestly, don’t watch it. And stop worrying, you’re going to be fine.

As a business built around low budgets and minimalism, a hostel requires crafty solutions to marketing and advertising challenges. Target prospects don’t access typical marketing channels in the same patterns as the general consumer (which is probably good news for the locals!), and cost of acquisition would most often exceed revenues from conventional tech-aided conversions.

As an avid hostel-goer, I’ve seen a lot of hostels struggle to increase guest turnover and profits because of these challenges. But I’ve also seen a lot of creative, successful marketing solutions along the way, and have become quite familiar with the backpacker/hostel-traveler demographic.

Here are four marketing ideas to help generate more business for your hostel — or offer a little inspiration for your other low-margin business.

1. Connect With the Community

Those looking to stay in hostels are looking for authentic, community-oriented, cultural experiences (jellied moose nose, anyone?). Connect with individuals and local businesses in your area and build relationships with them, so that you can later share these connections with your guests to improve their customer experience.

Use cross-promotional tactics to achieve greater word-of-mouth velocity. Your guests need to eat and want to explore your city, so offer these details — perhaps via the savvy use of well-placed fliers or a custom guidebook.

But don’t advertise these other businesses for free! Instead, approach eateries and other relevant businesses to see who’s willing to cross-promote your hostel to their customers, or recommend you to travelers getting into town.

2. Capitalize on Environmental Appeal

Environmental issues and conservation are higher priorities for this target demographic than for the general consumer. Thus, your environmental efforts will be much more appreciated by this market — so take advantage! Install shower timers, start a compost pile, encourage less paper product usage, consider installing solar panels. Or, you can get really creative and do something like installing a power-collecting dance floor to power your lights AND throw some wicked parties.

Not only will adopting eco-friendly policies boost your marketing efforts and lead to higher revenue, but your ROI should start increasing while your costs decrease (this may take a little time depending upon your initial investments on policy changes). So it’s a win-win-win — for your business, your customer and your planet.

But wait, there’s one more thing! Make sure you advertise your environmental efforts and policies both on your website and on premises. Post signs explaining your mission and policies, along with a call to action asking your guests for their help protecting the planet. Engage with your customers.

3. Set Yourself Up for Free Social Media Marketing

When people are traveling, they like to take pictures to share with others. Your hostel can harness that tendency into free social media marketing. Put something outlandish or cultural in your lobby or right outside your hostel. Passersby and guests alike will not be able to resist taking pictures and posting them to social media if it is impressive enough.

The key factor for success here? Make sure you put your hostel’s name and location (just the city will do — you don’t want to crowd the space) in a highly-visible spot for photo shoots. Offer your guests a strong Wi-Fi connection to ensure posting capabilities. And have some fun with it! You could have a monthly Instagram contest offering a free night’s stay for the most creative photo posted — and of course tagged with your hostel and hashtag!

4. Offer a Second Service

Down-time and slow seasons leave a lot to be desired for a hostel business. A great way to counter these inefficiencies is to offer a second service: bike rental, a café, a bar, travel services, a brothel (Just kidding! Making sure you’re paying attention).

Catering to a second, distinct crowd will increase your word-of-mouth advertising as well as your conversions. Additionally, you will be decentralizing risk and labor between the hostel and second component, effectively reducing costs and increasing profit margins for both aspects of the business.

Turning Email and Social Synergy Into Opportunity

In marketing — as in candy bowls — chasing too much opportunity can produce nothing more than paralysis or, at best, a dilution of the effort when it’s spread too thinly.

Too much candy isn’t good for you. As appealing as that big bowl of M&Ms looks right now, you know that if you get even get close to it, you’re going to regret it.

The same can be true in marketing. Working with a marketer who is merging three email programs into one campaign management application, I realized very early that there was huge opportunity for synergy of content as well as cross-selling and promotion between the three brands. The marketer was very excited about the possibility of managing the programs in a true CRM-driven fashion. That was only possible once the programs were generated off the same database and integrated at the subscriber level. Until now, the best this marketer could do was run separate promotions with similar offers, then try to compare the impact on revenue and unsubscribes after the fact. There were never very promising results.

With everything managed in one solution, the field is open for new approaches. A quick diagram of the combined customer base by brand showed a very slim overlap between them. At first glance, that feels like all upside — what a great opportunity to expose each brand to new, known audiences. It’s a big bowl of untouched delicious chocolate!

Synergy situations like this do create opportunity. That can be very exciting. But before you get too swept up in dreaming big, consider how important it is to prioritize those opportunities. In marketing — as in candy bowls — chasing too much opportunity can produce nothing more than paralysis or, at best, a dilution of the effort when it’s spread too thinly.

Consider these factors to help prioritize the opportunities before you:

1. Permission. Never assume permission. Period. First, it may be illegal depending on the countries where you market. Second, it’s bad marketing. There’s plenty of cross-sellling opportunities along the existing permission grants that you own today. At the same time, encourage subscribers to sign up for more types of messages from other brands in your preference center.

Lest you falter in your steadfastness, take this tale to heart: We had one marketer recently suffer a big drop in sender reputation and inbox placement. We traced the high complaints to a few campaigns promoting retail partners. Even though it was the marketer’s brand, template and “from” line, subscribers thought the messages were actually from the partners. Complaints were very high, even though the partners were trusted brands themselves. Subscribers knew they didn’t sign up for email from those brands and didn’t stop to check to see if it was a cross-promotion. They just clicked the spam button. Even if you own the partner brands, don’t assume your subscribers know that. I can’t emphasize enough how important it is to gain permission and earn it with every message you send.

2. Audience profile. You don’t have the time or resources to tackle every possible cross-promotion opportunity, so focus on the two to three that have the right criteria — reach, revenue and strategic importance. The latter is sometimes hard to gauge, but it usually involves business drivers, high-value customers or high-visibility projects. Balance those factors out in a spreadsheet so that you have real science behind your discussions. Make sure that every test has an actionable learning so that you can continue to improve and optimize.

3. Brand affinity. Just like in social marketing, customers who already trust you are the ones most likely to take your advice on cross-promotional purchases. Therefore, segment not just by permission status but also by the likelihood of brand affinity that will encourage cross-pollinization of the brands. For example, free online members may have a very low brand affinity and thus are least likely to welcome cross-promotions. Paid members who have purchased recently or have more than one product will be more likely to welcome upsell offers (and not complain).

4. Sales channel preference. A factor that became more important than we initially considered is sales channel — e.g., those who purchase in-store versus online. Not only are there demographic differences between the two, but there are also differences in the way email is used. For example, in this case email wasn’t very successful at encouraging in-store customers to purchase online, but it was effective in generating store traffic. Seems obvious now that we see the results, but of course the magic is in the discovery.

5. Customer life cycle. This is perhaps the most important factor. I’ve found time and again that marketers are way too confident in their assumptions about how interested consumers are in their offers. In fact, you have to start way back in the life cycle for cross-promotions, just as you would with new prospects (which, of course, many of these people are). Nurturing has to start with discovery and exploration. Too many times marketers hit prospects with offers well before they’ve established credibility with them or before they even acknowledge their own needs.

What have you learned from your efforts to create new revenue and customer satisfaction opportunities through data integration? Please share your thoughts and ideas in the comments section below.