Incorporating heterogeneity of travelers’ preferences into the overall hostel performance rating

Abstract

Hostels have become a very popular form of accommodation and their varieties have grown steadily in recent years. To ensure the sustainability of this business model, it is necessary to understand the main drivers influencing travelers to choose a hostel accommodation. For this purpose, we conducted an online survey using convenience sampling and purposive sampling techniques. Respondents' preferences to six hostel attributes (cleanliness, location, staff, atmosphere, facilities, and cancellation policy) were determined using discrete choice analysis. Sample results showed that the most important attributes are cleanliness and location, while the atmosphere is the least important one. However, widespread heterogeneity in preferences was observed, and cluster analyzes identified three distinct groups of travelers: “cleanliness sticklers”, “location demanders” and “party seekers”. Facilities and atmosphere were found to be very important attributes for particular clusters. These findings can help design a marketing strategy for each of the identified segments to ensure sustainable business. Finally, we have proposed a new approach to calculating the hostel overall rating based on attribute importance, which shows much better discriminatory power compared to the traditional average-based approach.