Currently, in Dublin, hundreds of the lucky hostel managers and owners are huddled in a conference room discussing the industry, with most of them hungover from a late one at Copper Face Jacks the night before. Congratulations to all the winners and good luck next year to everyone else. For a list of the 2015 winners, click here. The conference itself is a great opportunity for hostel owners, as Hostelworld does give good solid advice, and what is best for their business, is mostly good for their customers too.
Hoswtelworld has created the HOSCAR award system, to pretty much reward good hostel operator behavior. How they determine the winners has always been quite a mystery, but it really is quite simple if you put yourself in their shoes, and ask yourself “What is best for them?” So here is a breakdown of what is good for them, how is is good for you, and how it could not be good for you as well. This way, you can come up with a better strategy to win, and you can determine if winning a HOSCAR is even worth the effort.
You Send Them Lots of Money
Large hostels and small hostels alike can send hostelworld lots of money. A large hostel might only have 30% of its reservations come from the channel, yet consider the bed-nights, that number can still be huge and contribute greatly to hostelworld’s earnings. A small hostel could still do well. Say 80% of their revenues come from the channel, including using the online booking widget. This can still be a lot of bed nights, especially in a location that has great year round occupancy.
There are other ways, and it is smart to diversity your distribution, but I’m sure there are plenty of operators who are happy with 80%+ of hostelworld bookings and high year round occupancy too. You’ll make money, and they will make money too.
Your Guests Like You
It is common sense that keeping your customers happy should be a top priority. However you also need a lot of reviews too. The last number I recall is 200 a year. This means you take a lot of bookings from them, and send them commissions.
However, like burning bellyfat, as you get closer to your goal, the more difficult reaching your goal becomes. Especially if it is a high goal, like a 97% or 6 pack abs. Would that high of a score really make a difference? I know hostels with reviews in the top 6o’s and still have 99% occupancy. That hostel will definitely not win a HOSCAR, unless there was one for “Hostel that gives the least number of shits”
Hoswtelworld has created the HOSCAR award system, to pretty much reward good hostel operator behavior
You Use their Tools
Do you use their free management software, BackPack Online (BPO)? Do you use their online booking widget? Then great, you have a bigger chance. This means you are giving them your allocation, all the time. Also, if is difficult for you to use their competitors too (changing soon as they add channel manager integration). Even if you use their booking widget, you still give them some commission for those bookings. So they are making money this way too. Now compare that to booking.com that has a booking widget, where all direct bookings are fee (but there is a catch there too, they show your competitors if you have no availability).
Now you still can use your own system. Guestcentrix, Charts, Loventis, BanannaDesk, Frontdesk Anywhere, and Roommaster to name a few. Now you have the possibility to work your distribution channels. You will have to be a really big hostel in a good spot to still win, because your hostelworld reservations will be more limited. This could be more revenue for you though.
You are a Price Leader
How aggressive is your pricing strategy? Are you at the top of the market, or the bottom? Do you find yourself constantly dropping, or raising prices? It is obvious, hostelworld makes more money when the price is higher, and when a price-war kicks in, the averge city-wide ADR drops. So, it is in hostelworlds, and 99.9% of the time, your best interest to avoid this.
It takes some dedication to stay in the top price range. In order to pull this off, operators have to establish a great brand and product, offering the guests more in value than those cheaper competitors. They have to be on top of their game, to say the least. This is why the big hostels that employ career motivated individuals usually stay up there, and the boutique hostels who go overboard in what they offer stay up there too. But it is up to you. You don’t need to be there. You can be aggressive, and offer cheap rooms if you can keep your costs low too. The saying “nobody wins in a price war,” is not 100% true. It is more like 99.9% true, and my Wharton MBA buddy told me the true saying is “don’t get into a price war you cannot afford to win.”
You Keep Your Content Fresh
Hostelworld knows that fresh content converts. They have been investing resources to update their service, and you should be investing your time and energy to keep your content updated too. That old 400×500 pixel photo looks horrible on an ipad, and guests can barley recognize your hostel after the new exterior paint job. Update with new pics. Also you updated to an rfid key card and no longer charge for key deposits, and you have 24 hour reception, make sure you update that too. I’m sure they record your activity and like their customers who are active in the area, so keep it fresh. This one is a win-win for everyone, and it doesn’t take long to update, so your time cannot be that valuable not to update. There is no excuse. Your reviews might go up too, as fresh content gives them a better idea of what to expect.
Your Account Manager Likes You
Are you constantly bickering about bad reviews and fighting commission charges? Do you frequently make odd requests? You might be on the account manager’s bad side if so. Do you offer new suggestions? Do you thank them for helping you? If so you might be on their good side.
No one knows how exactly the winner is calculated, but I’m sure it comes down to a talk with the account managers before it is finalized. Also they are working harder than you think. The probably have tons of odd requests from multiple markets as well as acquisition targets to keep up with too. So stay on their good side and say thank you now and then. You pay a commission and they send you business, everyone should be nice and happy.
The exact formula for how HOSCAR winners are determined is unknown. However if you keep these in mind, and do what hostelworld would want, you chances are greater at winning. It could be more beneficial if hostelworld used this formula to determine the rank, focusing on the possibility of conversion rather than availability, but that is an entire other article. There could be other factors, if you can think of any, leave them in the comments below.