Increasing your hostel’s occupancy rate in the low season is one of the key challenges among hostel owners worldwide. So, what are the best ways to tackle this issue?
As I researched solutions, I was discouraged by how much bullshit I found on the topic: “Start social media marketing! Print rack cards! …” – only to name a few.
In addition, there is a myriad of articles for hotels but almost none for hostels. Hence, I decided to change that.
In this guide, you’ll learn 14 marketing tactics to increase your occupancy rate evaluated by three key factors:
- #1 Effectiveness – what impact will it make?
- #2 Investment – how much time, money and energy do you have to invest to see results?
- #3 Speed – how fast can you expect results?
The average occupancy rate of hostels worldwide is 56%. [Source] To get the stats about your area, simply contact the local tourism board. They should be able to provide you with this information.
A decade ago, it was found to be a standard recommendation to expect 50% of the local occupancy rate in your first year of business. Moreover, it was said that it would take about 3 years to catch up with the average.
Well, as times have changed, so has marketing. Today, you find hostels that managed to run with over 80% occupancy in their FIRST year. But how did they do it?
They knew what would work and what wouldn’t.
Let’s start with the former and work our way back to the least effective tactics.
#1 Improve Your Profile On Online Travel Agencies
Online travel agencies (OTAs) are the #1 most effective distribution channel for hostels. Full stop.
These platforms give you instant access to millions of potential guests all over the world. Without them, a hostel cannot survive these days.
Hence, improving your profile on their platform is the SINGLE most effective strategy you can use to increase your occupancy rate.
On average, 91% of the reservations hostels receive are from Booking.com and Hostelworld. [Source] Thus, I recommend you start with your improvements on these two platforms for maximum results.
So how can you improve your online profiles?
A) Use Stunning Images
Studies have shown that high-quality images are more important than the description or even reviews. [Source]
There are 3 requirements to take awesome pictures:
- 1) Camera: A standard smartphone camera won’t do the trick. You need a digital single-lens reflex (DSLR) camera.
- 2) Light: It has to be sunny outside and you should make use of additional lighting equipment.
- 3) Photographer: Hiring a professional photographer is probably one of the best investments you can make.
B) Improve Your Description
The art of influencing people through words is called “copywriting”. My favorite book on the topic is called “Ca$hvertising” by Drew Eric Whitman.
According to the book, changing the first sentence of your description can increase your conversion by up to 23%. Just read the description of the book on Amazon and you’ll see that this guy knows what he is talking about.
I’m serious. This guy is worth your time.
C) Copy The Best Hostels Worldwide
Why reinvent the wheel when there are proven and successful concepts out there?
Click here to download a FREE list with the top 30 hostels worldwide to analyze their online profile. This list contains all the hostels that have the highest rating across all online travel agencies.
Alternatively, check out my blog post about the top 10 greatest hostels worldwide.
The great thing about improving your online profile on OTAs is that you only have to do it once and it can work for you for years to come! All in all, if you’re looking for maximum results with minimum effort, that’s the way to go.
#2 Add More Channels To Be More Visible
The #1 tool to “get your name out there” is by using a channel manager. It allows you to automatically synchronize your beds and rates across all your distribution channels.
Instead of just adding new channels, take a look at my list of online travel agencies that the top 41 hostels use to market their hostel. While there are over 400 OTAs available, there are only a handful of effective channels for hostels.
Now the coolest part: Being more visible on online travel agencies helps you to increase your direct bookings on your website. Yep, you read that right.
This phenomenon is called “billboard effect” which basically explains that some travelers will want to read more information about your hostel when they see you listed on an OTA and thus visit your website.
Studies have shown that this can increase your direct booking by up to 26%. [Source]
Especially the low season is a good time to test unconventional online travel agencies such as Airbnb, Couchsurfing, BedandBreakfast, etc.
The greatest advantage of this strategy is that it is fully automated if you use a channel manager. A matter of a few minutes can result in hundreds of additional bookings over the years.
If you’re already running your hostels for quite some time, it’s also a good idea to take a glance at the reporting of your hostel’s property management software.
If you notice that most bookings come from a specific area, it’s a good idea to research if there are some special OTAs that focus on this location
#3 Increase Your Online Review Scores
No doubt, increasing the overall rating on various online travel agencies is a long-term strategy. However, it’s the key to stay in business in the long run since the importance of reviews is growing every single year:
- On average, travelers read through 6-12 reviews before booking a hostel [Source]
- 88% of travelers even trust online reviews as much as a personal recommendation from friends [Source]
If you find these numbers interesting, you’ll love my article about online review statistics for hostels.
It’s no question IF online rating reviews influence the occupancy rate but rather HOW BIG their impact is. A recent study shows that travelers are willing to pay 35% more for an accommodating with 4.4 stars compared to one with 3.9 stars. [Source]
In other words, an increase of 0.5 stars can justify up to 35% higher rates WITHOUT lowering the occupancy rate.
The good news is that there are several time-tested methods to improve your ratings. I’ve summarized the most effective ones in my guide about how to get BETTER online reviews for hostels.
I’ve written my master’s thesis about customer satisfaction. Hence, I guarantee you’ll learn something new.
To calculate how long it will take to increase your current ratings, simply use my free review calculator. It will tell you exactly how many reviews you need in order to achieve your goal.
And the instructions on how to use it are outlined for you here: how to get MORE online reviews.
#4 Make Your Guests Stay Longer
The reason why this strategy is so effective is that it’s much easier to keep people than to attract new ones. Now, there are two proven ways to make your guests extend their stays:
A) Increase the community aspect of your hostel
Hostel travelers might book your hostel due to a great price and good reviews, but they STAY because of other people.
In other words: the more you can contribute to bolstering the social aspect of your hostel the more likely they are going to stay! In fact, when I look back at all the hostels I visited, my stays were longest when I found great people.
An unconventional yet effective method is to organize weekly speed-dates among your guests. No joke.
Simply give your participants a piece of paper with 10 questions to ask and let them change the tables every 3 minutes.
When I worked as a financial consultant, all newbies had to go through that. The result: A hell of a lot of fun and many new friendships in a matter of a single hour!
It requires almost no preparation and it will definitely boost your marketing as well since this is “share-worthy stuff”.
B) Show your guests what your location has to offer
That’s a strategy I learned when I visited the “Base Hostel” on Magnetic Island, Australia. As I checked in, they gave me a paper with a map of the island that showed all attractions including how long it would take to see it.
Furthermore, the young lady at the front desk was so friendly to highlight her favorite spots for me. The map showed at first glance that there are a lot more things to see than I expected or even planned for.
Only 1 hour later I found myself standing in front of the reception and called the hostel where I had booked my next stay. I explained that I’d like to postpone it by 2 days. This is a true story.
How brilliant is that?
The map itself doesn’t have to be sophisticated. In fact, the map I received was black and white with some lines, some symbols (e.g. koalas) and had a few short descriptions.
But do you see how amazingly effective this strategy is?
Let’s apply cowboy math: If you are able to convince 1 out of 4 travelers to stay 3 nights instead of 2, you’ve increased your occupancy rate by 12.5%!
Boom. Be prepared to run out of beds!
P.S. I designed the map above within minutes using the free tool called “Canva”. With this link, you can check it out get one FREE premium month.
For more awesome free tools, visit my resources page.
#5 Optimize Your Pricing Strategy
When I refer to “pricing strategy”, I do NOT mean simply to lower your bed rates in order to receive a higher occupancy rate.
There are more sophisticated methods to increase your occupancy rate WITHOUT lowering your prices:
- Using the power of odd prices
- Offering a guarantee
- Bundling in bonuses
- Limiting the choices
- Using the contrast effect
- Applying dynamic pricing
Several of these strategies have been proven to increase the occupancy rate even up to 2 figures! That’s the reason I dedicated an entire and in-depth article about pricing strategies for hostels.
If any of the above sounds unfamiliar, I highly recommend you work your way through the article. This can be a game-changer for you.
No doubt, dynamic pricing in combination with a great property management software is the way to go if you’re serious about increasing your occupancy rate.
In simple terms, it’s the art of lowering and increasing your rates based on the actual demand. That’s where a sophisticated and complete PMS like the one from Cloudbeds pays off. It will take care of this task in a fully automated manner.
To see how it works, check out my guide about dynamic pricing for hostels. Gosh, I love this tool.
#6 Optimize Your Website For Conversions
Your website is another part of your online presence and is the key to receive direct bookings.
If you don’t have a website yet, I highly recommend my step-by-step guide to create a hostel website for less than $100 and within only 15min.
Yes, you read that right. It has never been easier to create your own professional website.
The SOLE GOAL of your hostel website is to convert visitors to paying guests. Hence, your entire web design should be built around convincing people to reserve a bed.
Now, there are many ways to optimize your website:
- Have a FAQ page
- Use the space above the fold wisely (=what you see without scrolling down)
- Use the right theme
- Choose the right colors & fonts
- Play social proof (e.g. reviews, ratings, etc.)
- Apply search engine optimization (SEO)
Again, this topic is so vitally important that I’ve dedicated an entire blog article with 21 ways to improve your hostel website. It also covers the small changes that come with a big impact.
#7 Start A Blog
Creating a blog is a great idea to increase the number of visitors to your website, aka “traffic”. Your design is what keeps them there, but your content is ultimately what attracts them.
As a general rule, the more visitors you get, the more beds you’ll sell due to the increased visibility. However, you have to make sure that the articles you’re publishing are RELEVANT to your target market (e.g. travel tips).
A blog especially gains importance if the entire area where you’re located isn’t too attractive by itself. Hence, your job is to “sell your location” by writing articles about all it has to offer.
Now, don’t worry. You don’t need to write these articles yourself.
The two most convenient ways are to either let travel bloggers write them in exchange for free accommodation or to outsource this task to freelancers on freelancer.com.
On freelancer.com you can get awesome content for only a few bucks. By using this link, you’ll even get a free bonus of $20 USD on their website.
Hands down. This is by far my favorite website for jobs like this.
That said, it still takes some time because you might want to proofread the articles and have to publish them yourself. Furthermore, this is not a short-term fix.
Especially if your website is new, don’t expect any real traffic before the first 6 months after publishing the article. Google first has to index all your pages, i.e. measuring and testing how “valuable” the content is for related searches.
However, the beauty of a blog compared to social media is that it’s a long-term strategy in which you’re in full control! Your content will be working for you in 5, 10, 15, and even 20 years.
A social media post, on the other hand, is obsolete in a matter of days.
#8 Use Joint Ventures With Other Hostels
If your hostel is on a popular travel route, having a joint venture with other hostels in place can be a lucrative strategy to increase your occupancy rate.
I experienced this strategy when I traveled up the east coast of Australia. In the hostel where I stayed in Airlie Beach, I received a voucher for 10% off for a hostel in Townsville which was the next stop of my hop-on / hop-off bus.
Since people either travel up or down, the hostels built relationships with their neighboring hostels on a win/win basis. That’s genius!
While not all travelers will take advantage of such an offer, it will still automatically lead to a regular stream of guests without having to invest any additional time. Furthermore, the quality of guests is typically way better than what you receive through OTAs.
The basic idea is to look where your guests are BEFORE they come to your hostel and where they go AFTER it.
However, if there’s no pattern, i.e. travel route established or you’re located in the middle of nowhere, this strategy might not work out for you.
#9 Create Exclusive Packages & Deals
The effectiveness of bundling packages and special deals is highly dependent upon how you design your offers.
While this method is commonly used by hotels to increase the occupancy rate, it’s rather uncommon for hostels since the target market is quite different.
A weekend-package for couples with spa and wine-tasting might work for hotels, but it’s unlikely that hostel travelers are looking for that.
Hence, when using this strategy effectively, make sure you know EXACTLY what your target market desires!
If your guests are more action-oriented travelers, you might have good cards by offering special deals for bungee jumps, white water rafting, or offroad bicycle tours.
If your focus is on working-holiday backpackers, it’s great to have joint ventures with companies that are looking for short-term workers. If you can promise a fixed job, they will even travel to your area to get it. No joke.
Last but not least: You can also organize your own events to bring people into your area and your hostel. I know two hostels that have organized music events since they themselves love it and they have been fully booked during that time even though it was the off-season.
That all being said, packages and deals typically require a high time investment and only bring short-term results.
#10 Make Your Guests Come Again
There are often discussions about whether loyalty is an important element for hostels or not. And there’s a good reason for that: Many hostel travelers do not consider traveling to the same area ever again.
Hence, a “loyalty program” might probably rather work for B&Bs and hotels who attract families and business travelers.
However, there’s a small percentage of hostel guests who will come back, if there’s a strong enough incentive. Your task is to basically make it painful NOT to come back to your hostel.
The following is a strategy I learned from reading marketing genius Allan Dib’s book “The 1-Page Marketing Plan” (recommended read).
- Step 1: Find out your average length of stay (e.g. 3 nights)
- Step 2: Offer a free night for every 3 nights someone stays in your hostel
The key is that there has to be at least a certain period of time (e.g. 4 weeks) in between their current stay and the next stay. They also have to book at least double the time compared to what they get for free.
Now imagine this: A guest stays for 6 nights and qualifies for 2 free nights after 4 weeks. Damn, that HURTS to not take advantage of, right?
And if they decide to come back, how likely is it that they’ll stay longer than the 4 nights they have to book in order to receive their 2 free nights?
By applying this strategy, you’re cutting a piece of a profit you otherwise wouldn’t have!
There’s a reason why Allan Dib’s book was the leading best-seller over months! Just have a look at the reviews. Hands down. I’ve never read a better business book than this one.
For more book recommendations, visit my resources page.
#11 Apply Niche Marketing
Niche marketing describes the process of marketing to a narrow target market – called “niche” – by addressing their specific needs and desires.
A healthy sense of logic would have you to believe that a broader target market leads to more potential guests, right? Well, the reality is that if you market to “everyone”, your message gets diluted and doesn’t speak to anyone.
By having a laser-like focus on a specific group, you’re much more likely to score a hit.
This strategy can be extremely effective and is responsible for the success of many companies. However, you need to know EXACTLY what your niche desires.
Hence, it all starts with an in-depth target market research. After you’ve done the research, it’s about where you can find these kinds of people to actually be able to talk to them.
This is where the reporting of proper property management software can help you out. It gives you many relevant stats such as gender, nationality, etc. of your guests
I’ve written an entire article about niche marketing for hostels in case that’s something you would like to get into.
#12 Loosen Your Policies
If you’ve established strict policies for your hostel, it might be worth loosening them in the off-season:
- Go back to a 1-day cancellation policy or have none at all
- Accommodate pets
- Reduce the minimum age and allow elderly people to visit your hostel
- Skip your minimum and maximum stay requirements
- Offer accommodation for big groups
A single sentence in your policies that states that these rules only apply for a certain time during the year will do the job.
#13 Social Media Marketing
Super Slow Results
If you’ve read my article about social media marketing for hostels, you probably already know that I’m in a love-hate relationship with this trendy topic.
Yes, I do think it was a breakthrough and a revolution when it comes to the level of connectedness it enabled. However, when it comes to hostel marketing, I think it’s utterly overhyped.
While there are some hostel owners who claim to receive bookings via Facebook, I doubt that their social media presence alone made them book the hostel.
After all, most travelers love comparing prices and ratings on online travel agencies.
Now, the biggest drawback of social media is that it’s extremely time-consuming. While there are some awesome tools like Buffer that can automate a big part of it, it’s still WAY too much in comparison to the potential bookings you can receive.
In other words: There’s no return on investment (ROI).
In fact, I surveyed 59 hostel owners about what they’d do differently if they could start again from scratch and more than 20% mentioned that they’d spend less time on social media marketing.
The only real exception to this rule is when it’s your passion and you like spending time on social media. Then, for god’s sake, go for it! 🙂
However, make sure to read my guide about 9 proven tips to increase the effectiveness of social media marketing for hostels. It also contains statistics of the top 41 hostels worldwide.
#14 Traditional Offline Marketing
N/A (No Results)
I was shocked to read blog posts online that recommend printing flyers, brochures, rack cards, etc. to promote your hostel offline in this day and age.
Some even recommended to pay money to get into travel guides which were described as the “bibles for tourists”. Well, they might be… for your grandparent’s generation.
Traditional offline marketing is looooooong dead. Hence save your time and effort and improve what really keeps the cash register ringing.
Here’s an example from Hostelmanagement’s forum:
And this was 12 years ago! I believe I made my point.
Before you leave: Answer this quick question and help our community.
What’s YOUR secret sauce to increase your hostels’ occupancy rate?
Share your opinion in the comment section below!
P.S. People who read this article were also interested in my guide about hostel pricing strategies.