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Authorities challenge hostels in Moscow

30 April 2015
30 Apr 2015 -

The Moscow Times recently reported that youth hostel operators in Moscow are about to come into conflict with the Russian authorities, with proposals made to prevent hostels from operating in residential buildings. The article highlighted concerns about hostels operating in residential buildings, and the challenges these present for the local residents.russia-vector-staywyse

“It is important that cities develop appropriate regulation for the hostel industry” said Phillip Houghton, Chairman of the STAY WYSE Executive Board. “Regulation imposes minimum standards to protect both travellers and local residents, while also ensuring that a hostel adds real value for the local community.”

STAY (Safe Travel Accommodation for Youth) WYSE, the global not-for-profit industry association for the youth travel accommodation sector, encourage measures that ensure that hostels are properly regulated, well-run businesses. Insofar as the Moscow authorities seek to address unregulated hostels operating in residential buildings, then STAY WYSE would support the development of appropriate regulation. However, with the New York example in mind, Philip Houghton emphasised the need to ensure that “any regulations are appropriate, and are made in consultation with the industry.”

The situation in New York City demonstrates the importance of working with the youth travel accommodation industry to ensure that any new legislation does not have an unintended impact. In 2010 legislation was introduced in New York that effectively prevented the operation of youth hostels. Existing businesses closed and new developments were stifled. Hostelworld are quoted in the Moscow Times article as saying that the city had lost an estimated $1.2 billion in tourism revenue due to the 2010 changes. A new bill was introduced in March this year to effectively allow hostels to operate in New York once again.

When run properly, a hostel can bring tremendous value to the local area. “Youth travellers represent a significant percentage of the international tourism sector. Over 20% of all international arrivals are young people, and research from the WYSE Travel Confederation shows that these young travellers spend more than the average international traveller on a trip. What they save in accommodation costs is then spent within the local economy, in cafes and restaurants, shops, on local tours or activities. These represent valuable tourist dollars for any destination- dollars that may not be captured if there are no affordable accommodation options.” said Philip.

Aside from missing out on tourist expenditure, the failure to ensure an adequate supply of well managed budget accommodation can bring a new range of problems. The lack of hostels in New York City saw a boom in the volume of Airbnb-style apartment rentals, which often form part of unregulated market, and can in turn generate a new range of concerns including guest and local resident safety, and the ability to collect the applicable taxes.

The youth travel industry is estimated to be worth some USD 230 billion a year. There is enormous potential for destinations to capitalise on this- but providing appropriate and well regulated accommodation options is critical for building the market and attracting the travellers.