Currently, in Dublin, hundreds of lucky hostel managers and owners are huddled in a conference room discussing the industry, with most of them hungover from a late night 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 provides solid advice, and what is best for their business is mostly good for their customers too. Hostelworld has created the HOSCAR award system to 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 it benefits you, and how it could potentially 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 considering 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 account for a lot of bed-nights, especially in a location that has great year-round occupancy. There are other ways, and it is smart to diversify 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. The last number I recall is 200 a year. This means you take a lot of bookings from them and pay them commissions. However, like burning belly fat, as you get closer to your goal, the more difficult reaching your goal becomes. Especially if it is a high goal, like a 97% rating or 6-pack abs. Would that high of a score really make a difference? I know hostels with reviews in the top 60s that still maintain 99% occupancy. That hostel will definitely not win a HOSCAR unless there was one for "Hostel that gives the least number of shits."[pullquote]Hostelworld has created the HOSCAR award system to essentially reward good hostel operator behavior.[/pullquote]
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 better chance. This means you are giving them your allocation all the time. Also, it is difficult for you to use their competitors too (this is changing 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, which has a booking widget, where all direct bookings are free (but there is a catch—they show your competitors if you have no availability). You can still use your own system, such as Guestcentrix, Charts, Loventis, BananaDesk, Frontdesk Anywhere, and Roommaster, to name a few. You now 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 mean 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 lowering or raising prices? It is obvious that Hostelworld makes more money when the prices are higher, and when a price war kicks in, the average city-wide ADR drops. So, it is in Hostelworld's, 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 guests more 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 that go overboard with 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 invest your time and energy to keep your content updated too. That old 400x500 pixel photo looks horrible on an iPad, and guests can barely recognize your hostel after the new exterior paint job. Update with new photos. If you’ve updated to an RFID key card and no longer charge for key deposits, and you now 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 improve 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 exactly how 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. They 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, your chances of winning are greater. 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 entirely different topic. If you can think of any other factors, leave them in the comments below.