Hostel Business Wants to Make a Push Back Into New York


“Hostel owners are like backpackers,” Ms. Dolan said. “We dare to go where others haven’t gone.”

But the issue in New York City, these hostel experts say, is that too few backpacking and other young and budget-conscious travelers dare to pass through town, because of a dearth of hostels. As a result, they said, the city is not only losing tourist business and tax revenue, but also the chance to advertise itself to young people from around the country and the world who might someday return to work and live in New York.

“I think hostels make great cities accessible to young people,” Ms. Dolan said. “New York is missing out.”

Hostel proponents blame a six-year-old New York State law, the Illegal Hotels Bill. The law was aimed at nonconforming rentals, overcrowded single-room occupancy residences and other forms of lodging deemed substandard by the legislation’s sponsors.

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Anne Dolan of Dublin, a founder and director of Clink Hostels, on a tour of potential locations for a hostel in New York.

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Hilary Swift for The New York Times

Although Airbnb was not as big a presence in 2010 as it is now, the law has been wielded to crack down on various types of listings on the company’s service. Last week Airbnb settled a lawsuit against New York City in which the company had opposed the city’s right to impose fines on Airbnb hosts who listed properties that did not conform to the 2010 law.

Also caught in the 2010 law’s dragnet were almost all of New York City’s hostels, according to Feargal Mooney, whose company arranged last week’s tour. Mr. Mooney is chief executive of Hostelworld, a hostel booking firm that represents properties in more than 170 countries.

Nearly five dozen New York City hostels were put out of business by the 2010 law, and new ones have been prevented from opening, Mr. Mooney said. Most of the remaining ones advertise as hostels but are now formally classified as hotels.

Mr. Mooney and others on the tour say they hope that a new piece of legislation, awaiting a hearing by the New York City Council, could revive the city’s hostel business.

Right now, the only bona fide hostel in the city is run by a nonprofit group, Hostelling International USA, on Amsterdam Avenue on the Upper West Side, he said. It is able to operate its New York City property because of its building classification and special use permit.

Aaron Chaffee, Hostelling International’s vice president for hostel development, said he would welcome additional hostels in the city but supported the need for regulation.

The final stop on the bus tour was at the Paper Factory, an elegant, edgy hotel decorated with repurposed objects from its former life as a pulp plant.

“Wow, I love it,” said Eric van Dijk, managing director of Meininger Hotels, a company based in Berlin that owns 16 hostels in Europe and has 13 more in the pipeline there. He said the game room and other communal spaces gave the property the look and vibe of a hostel.

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The Paper Factory, a hotel in Queens whose owner would like to convert it to a hostel if a New York City law is changed.

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Hilary Swift for The New York Times

Gal Sela, the hotel’s owner, went into contract for the building in 2010 intending to operate it as a hostel. But when the law went into effect, he couldn’t proceed.

“I like the business model of hostels,” Mr. Sela said. The revenue per square foot from dorm-style rooms is profitable, he said, but more important are a laid-back ambience and a focus on community. “It’s something unique in hospitality,” he said. “I’d change it into a hostel in a heartbeat if the law changes.”

Before the 2010 legislation, some hostels were substandard, Mr. Mooney conceded, but not all. He said that hostels around the world today were typically safe, clean and modern, with kitchens and laundry facilities, on-site cafes and even 24-hour reception desks. Many reflect high-end design similar to boutique hotels.

Hostelworld has hired Jerry Kremer, president of Empire Government Strategies, a lobbying firm, to help change the law affecting hostels.

“Young people coming to the city have very few choices,” Mr. Kremer said. “The hostel industry is frustrated that the city hasn’t embraced a form of tourism that not only brings in money but also encourages young people to come to the city and stay. Any other major city in the country would be chasing after us.”

New York currently yields about $234 million a year in revenue from hostels and related tourism — about a third of the amount a city its size should be generating, according to a recent Hostelworld analysis.

“Hostel owners will go in areas that are underserved and turn them into something special and change a neighborhood,” Mr. Kremer said. “They are ready, willing and able to write checks.”

The group met with City Council members to discuss legislation that would authorize the creation of hostels and provide specific oversight for their licensing, regulation and operation. The hostel group hopes to have a hearing before the Committee on Housing and Buildings by early next year.

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Jerry Kremer at Madame Paulette, a potential site for a hostel in Long Island City. Mr. Kremer is a lobbyist working to make New York City’s laws more friendly to hostels.

Credit
Hilary Swift for The New York Times

“It was a good and productive meeting,” said the bill’s primary sponsor, Councilwoman Margaret S. Chin, a Democrat whose district is primarily in Lower Manhattan. Providing good, safe and affordable accommodations for young travelers is “critical,” she said.

Laura Daly, deputy director of the World Youth Student and Educational Travel Confederation, a nonprofit trade association for the global youth travel industry, said international destinations like Berlin and Amsterdam welcomed hostels “with open arms.”

Paul Halpenny, a group director for Hostelworld, said Barcelona was another city where political efforts brought results. “Owners there spent years battling the city,” he said of Barcelona. “But today it has some of the best hostels in any city around the world.”

In Rome, a change in the law last year resulted in about eight new or planned hostels.

In the United States, Ms. Daly said, cities including Miami, Los Angeles and Chicago are attracting hostel investment over New York.

Generator Hostels, based in London, has a dozen properties and several in development in Europe, and a property under construction in Miami scheduled to open next year.

Both Generator and Meininger, the German company, have full-time staff in the United States actively looking for sites.

And yet, for all the activity, hostel development in the United States has been slow, compared to other regions of the world, said Bjorn Hanson, a professor of hospitality and tourism at New York University’s Tisch Center.

That, he said, is because of strict regulations, the rise of less expensive limited-service hotels in urban areas and the popularity of hotel-chain loyalty points. And not everyone sees the appeal of bunkhouse camaraderie.

Still, there is a trend even in the mainstream lodging industry for guests to spend less time in their hotel rooms, in favor of public spaces to work and meet fellow travelers. “Hostels do that extremely well by offering more of a social experience than most hotels,” Dr. Hanson said.

All of which is why the visitors on the bus in Long Island City last week remained hopeful.

“There’s power in numbers,” Ms. Dolan of Clink Hostels said. “It seems like the right moment.”

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