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How a School Trip to the Country Turned into a $34 Billion Industry

by Mary Fichter in Daily Edition | February 25, 2013

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When German school teacher Richard Schirrmann took his students to the country to get some fresh air in 1912, he was disappointed by the lack of accommodations. They had to spend the night in a barn. So he raised enough money to renovate some of the 50 rooms of the medieval Altena Castle and opened the world’s first hostel. Cheap short-term lodging (a hot meal was usually included) for groups of adventuresome traveling youth was a big hit, and still is.

Last week, NYC Mayor Michael Bloomberg vowed to legalize for-profit youth hostels in the city to help attract more young tourists (lots of buildings are being rented out illegally as hotel rooms). His goal is to attract 175,000 more young tourists a year to New York. (The city had a record 52 million tourists in 2012). His strategy might not be as altruistic as Schirrmann’s — there’s big money in today’s chic hostel industry. It’s now valued at $34 billion. Designer/boutique hostels like The Out NYC charge $99 a bed, with access to roof beer gardens, 24 hour spas and gyms. Located on 42nd Street in Times Square, The Out is a far cry from the quiet Lenne river valley of Altena Castle.

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