Why are Hostels in Europe so Expensive Right Now? (2024)

Jon Miksis Jon Miksis clock Updated May 23, 2024 tourism Global Knowledge
by Jen
Why are Hostels in Europe so Expensive Right Now
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Are you wondering why hostels in Europe have become more expensive lately? I’m here to share the primary factors driving up the prices.

Noticed that staying in a European hostel isn’t as wallet-friendly as it used to be? Yeah, me too. On my last trip through Europe, from the bustling streets of Barcelona to the cozy corners of Krakow, the prices had me doing a double-take. What’s up with that?

In this deep dive, we’ll uncover the nitty-gritty behind the rising hostel costs. It’s not only about a post-pandemic bounce back—there’s more at play. Think inflation, seasonal trends, and even the Airbnb effect. Each of these factors is adding a bit to what ends up on your bill.

Stick with me as we break down these cost drivers. If you’re planning a trip or just curious about the current hostel scene, I’m here to share what I’ve learned. Let’s figure this out together.

Pinterest photo about hostels in Europe

The catastrophic effect of the pandemic for hostels in Europe

Many travelers don’t realize just how much the pandemic has reshaped the hostel landscape across Europe. During the tough months of 2020, an estimated 12.5% of hostels listed on Hostelworld closed their doors permanently. Notable casualties included places like Retox in Budapest and Ginger Monkey in the High Tatras of Slovakia, which were beloved by backpackers.

This reduction in the number of available hostels has led to a tighter supply, pushing prices higher as demand rebounds. Today, we’re still feeling these effects. The decreased availability means fewer options for budget travelers and consequently, steeper prices at remaining hostels.

However, there’s a silver lining. There’s a growing sense of optimism that the hostel industry in Europe will continue to recover. New budget accommodations are beginning to appear, promising more opportunities for affordable travel. As we look forward, the resilience of the travel community and the enduring appeal of hostels suggest that this vital part of European travel culture will find ways to thrive again.

1. Post-pandemic demand surge

Ever since travel restrictions were lifted, it feels like everyone has been making up for lost time. Hostels across Europe are seeing a massive influx of travelers eager to explore again. This sudden spike in demand is a primary reason why hostel prices have shot up.

Cities like Paris, Amsterdam, and Rome, which have always been hotspots, are now bursting at the seams during peak seasons. With more people ready to backpack across Europe, hostels can hardly keep up. It’s basic economics—higher demand leads to higher prices. And right now, the demand is through the roof.

For instance, last October—not even a peak travel month—I shelled out 80 euros for a dorm bed at YellowSquare in Florence. Granted, it was a last-minute booking, but pre-pandemic, this would have typically cost around 30-35 euros.

From chatting with fellow travelers, it’s clear we’re all feeling the pinch. Yet, despite the higher costs, the thrill of meeting new people in shared spaces keeps many of us coming back.

With lifted travel restrictions, hostels in Europe are experiencing a surge in demand, leading to price increases.
With lifted travel restrictions, hostels in Europe are experiencing a surge in demand, leading to price increases.

2. Inflation & economic factors

Inflation is a real issue that’s hitting our wallets hard, especially when traveling. Over the past year, Europe has experienced an inflation rate that’s made everything more expensive, including hostel stays.

In October 2022, the inflation in the EU peaked at an alarming 11.5%. Consequently, hostel operators are facing higher costs themselves—from food supplies for breakfasts to laundry services for those endless piles of sheets.

Looking at today’s prices, I can’t help but miss the days when “budget travel” actually meant your wallet got a break. Grasping these economic reasons, though, puts it all into perspective.

Thankfully, there’s a silver lining. According to Eurostat, the statistical office of the EU, inflation has been on a steady decline, falling to 3.1% in January 2024 from 3.4% in December. This gradual reduction in inflation brings a glimmer of hope. As inflation eases, we might start to see cheaper hostel prices in Europe.

Woman using laptop with calculator and notes on table

3. The Airbnb effect

Ever noticed how cities like Barcelona, Lisbon, and Florence seem more crowded these days? It’s not your imagination. These spots are feeling the squeeze from platforms like Airbnb. As more apartments flip to short-term rentals, locals and tourists are finding themselves at odds.

This shift means traditional hostels, already sparse, now face stiffer competition. They’re among the few budget-friendly options left, and as a result, prices are climbing. On my last visit to Lisbon, the change was palpable. Streets once known for local charm are now lined with rental signs catering to short stays.

It’s a tough scene, honestly. On one hand, these platforms offer fantastic choices for travelers, but they also crank up the pressure on prices and availability. It’s a trade-off that’s reshaping our favorite European cities in significant ways.

Cities like Barcelona, Lisbon, and Florence face increased competition from Airbnb, driving up hostel prices.
Cities like Barcelona, Lisbon, and Florence face increased competition from Airbnb, driving up hostel prices.

4. Seasonal variations

You’ve probably noticed that traveling in August means paying premium prices, right? Well, that’s seasonal variation in action. During peak tourist seasons—summer in most of Europe and winter in ski regions—hostel prices skyrocket.

It’s all about supply and demand. More tourists flocking in means more beds occupied, and hostels can charge more. It’s one of the reasons why hostels in Europe are so expensive.

Last summer, trying to find an affordable bed in a popular city like Rome was like searching for a needle in a haystack. Prices were nearly double what you’d expect in, say, November. It’s not just summer, though. Think about cities famous for Christmas markets or spring festivals, such as Bruges and Vienna. Prices surge whenever there’s a big draw.

It makes planning crucial. Traveling off-peak can save you a bundle and let you avoid the crowds. Trust me, experiencing a city like Paris in the fall can be just as magical as in spring, but with fewer tourists and lower costs.

Image showing snowman in the freshly fallen snow

5. Rising energy costs

If you’ve been wondering why European hostels are so expensive lately, a big part of the answer lies in the surging energy costs. According to Eurostat, electricity prices in Europe have more than doubled in many places, with a whopping 114% increase from 2021 to 2022. And in Estonia, it’s even wilder—a 323% jump!

Several factors are at play here. For starters, geopolitical tensions, particularly the conflict in Ukraine, have drastically affected energy supplies. Europe heavily relies on natural gas, and disruptions have forced prices to skyrocket.

For hostels, this means paying a lot more to light up common areas, heat rooms, or even run that all-important Wi-Fi. And unfortunately, those extra costs dribble right down to us, the guests.

When I booked a hostel in Tallinn last spring, the rate was noticeably higher than my previous visit. The manager mentioned the soaring energy costs as the main culprit. It’s tough, because while we all want to travel sustainably, these rising costs remind us that every little comfort comes with a price.

European hostels are more expensive due to surging energy costs, with electricity prices doubling in many places.
European hostels are more expensive due to surging energy costs, with electricity prices doubling in many places.

6. Regulatory changes and their impact

You might be surprised to learn how much new regulations can affect where we stay while traveling. In Europe, recent regulatory changes have really shaken up the hostel scene.

Cities are really tightening up on what they require from accommodations, like stricter safety protocols and greener operations. These changes are all about making sure places are safe and eco-friendly, which is awesome for us as guests, but they also bump up the hostel’s running costs.

For example, many European cities have introduced rules that limit the number of beds per room or require better fire safety measures. These are great for us as travelers because they improve safety and comfort. However, for hostel owners, meeting these standards means spending more on renovations and compliance. These costs are often passed down to guests in the form of higher prices.

It’s a trade-off. We pay a bit more, but we also sleep better knowing we’re in a place that’s up to code and kinder to the planet.

A woman inspects a hostel room

Top tips for finding cheap hostels in Europe

Looking for a great deal on hostels in Europe? Here are some of my favorite strategies to snag a budget-friendly spot:

  • Book early or last minute: Sounds tricky, but hear me out. Booking early often secures the best rates, especially in peak season. However, if you’re flexible, last-minute bookings can also lead to discounts as hostels try to fill empty beds.
  • Stay longer: Many hostels offer discounts for longer stays. So, if you find a city you love, staying a few extra nights can actually save you money.
  • Use comparison sites: Always check multiple booking platforms. Hostelworld, Booking.com, and Hostels.com are my go-tos. Compare prices across these to ensure you’re getting the best deal. Always ask the hostel if you can book directly – it’s often the cheapest option.
  • Go off the beaten path: Hostels in major cities like Paris or Rome are pricier. Try staying in smaller towns or just outside the city center. Public transport in Europe is reliable and can whisk you into the action in no time.
  • Consider membership discounts: If you travel often, consider a hostel chain membership like Hostelling International. The membership fee can pay off with the discounts you’ll receive.

Frequently asked questions (FAQs) about the price of hostels in Europe

Explore our FAQs to find out everything you need to know about hostel prices in Europe. Save money and plan your dream European vacation with ease!

What is the average cost of hostels in Europe?

The average cost of hostels in Europe varies widely by location and season but generally ranges between €20 to €50 per night for a dormitory bed. Cities like Amsterdam, Paris, and London tend to be on the higher end. You can find the cheapest hostels in Europe in cities like Budapest and Prague.

Why are hostels so common in Europe?

Hostels are common in Europe due to the continent’s history of backpacking and inter-country travel. The culture of traveling light and on a budget has been embraced by young travelers and students.

Backpacker in Calton Hill, Edinburgh, United Kingdom
Backpacker in Calton Hill, Edinburgh, United Kingdom

What is cheaper in Europe: hostels or Airbnbs?

Generally, hostels are cheaper than Airbnbs, especially for solo travelers. Hostels offer shared rooms that significantly cut down the cost compared to renting an entire Airbnb apartment. However, for groups or families, Airbnb can sometimes be the cheapest option.

What is the cheapest site to book hostels?

The cheapest site to book hostels often varies, but I’d recommend Hostelworld and Booking.com. It’s a good idea to compare prices across these sites and check for any special deals or discounts that might be available. Sometimes, it works out cheaper to book directly with the hostel.

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