Hostelworld moves to online commission

Hostelworld.com will move to a commission-based model to generate ancillary revenue after ten years of selling accommodation only.

The Hostelworld business, owned by Dublin-based Web Reservations International, has launched a Travel Store channel on the site with plans for “revenue sharing, largely based on commission”. The channel sits separately from hostelworld.com’s booking pages, travel guides and social channel, Travel Network.

Commercial director Santina Doherty said: “We thought it better to offer our customers other products within a ‘travel store’ environment and not detract from our core business by covering the home page with adverts.” Doherty joined the business in January from Ryanair, where she was head of advertising and ancillary revenue.

Travel Store’s launch partners include World Nomads travel insurance, Viagogo events ticketing, Lonely Planet guidebooks, TravelnRoam mobile sim and Eurolanguages courses. Doherty said more partners would be added, with “transport providers, such as a rail and coach operator” the main target.

Docherty said Hostelworld.com will make money from Travel Store “on a revenue sharing basis, largely commission-based”. It will market Travel Store to existing customers by email and through its Twitter and Facebook pages. There will also be “a certain amount of paid search marketing” to drive traffic.

The business has sites in 23 local languages, targeting markets including Brazil and China. The US is its biggest source market, accounting for 15% of customers. The UK accounts for about 7%. “There are seven or eight countries with a similar share to the UK,” said Doherty, “but we have customers in 170 countries.” She added: “There is a lot more domestic travel going on and this is more than offsetting the drop in international travel.”