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A mural that depicts “hello” in different languages, painted by a visiting youth group, hangs on the first floor of Hostelling International Chicago.

Chicago hostels grow in popularity among travelers

by Michelle Kim
Oct 17, 2013

In the 2005 horror movie “Hostel,” college students on a European vacation checked into an ultra-cheap dormitory-style hostel and ended up being tortured in dungeon-like rooms.

But visit one of Chicago’s hostels and you’re more likely to encounter clean, modern, private and semi-private rooms and organized activities, such as pub crawls, city walks and cookie baking parties in the communal kitchen.

Because of such amenities, hostels are gaining in popularity in the Chicago area, with four new properties opening in the past 18 months, bringing the total to eight.

Sydell Group Ltd. is planning to open a 16-story hipster hostel, Freehand Chicago, by 2015, according to a spokesman for the company. It will replace the Tokyo Hotel on Ohio St. just off the Magnificent Mile.
“Occupancy over the past three years has risen by 10 to 15 percent for Chicago Getaway Hostel,” said Mat Meadows, the hospitality development director for Convexity Hospitality, which owns Getaway. Revenues have also grown at a double-digit pace. 

Similarly, revenue for non-profit Hostelling International Chicago in the Loop, rose 21 percent to $4.04 million in 2011 from $3.34 million in 2010, according to its 990 tax filing for 2011.

Minoru Ueda stays at HI-Chicago in the Loop when he travels to the city to perform as a substitute violinist for the Illinois Symphony Orchestra. The 29-year-old violinist said the hostel was an affordable and comfortable place to stay, and he had a chance to make new friends during visits.

“Last night I met this Chinese friend who started his MBA in Philadelphia,” Ueda said. “He came to Chicago for a trip with his classmates. We became friends and I’m planning to introduce him to my Japanese friends this afternoon.”

Kimberly Turner, the assistant general manager of HI-Chicago, said most of their clients are international travelers like Ueda.

“I think anytime you stay in a shared space, you will hopefully gain that understanding as well as promote your own identity and background, your own culture,” Turner said.

The hostel offers 500 beds for about $30 a night, leaving extra cash in travelers’ pockets for sight-seeing and shopping. HI-Chicago is seeing more business travelers, though tourists still make up the majority of guests.

Chicago saw a 6.4 percent increase in visitors to 43.4 million in 2012, according to Choose Chicago, who pumped $12.76 billion into the local economy. The city ranked ninth in global tourism in 2012 with 1.4 million international visitors, many of them from Asia and South America.

Websites such as Expedia, Orbitz and have added hostels to their travel options, which has helped get the word out, Meadows said.

The peak season for hostels, similar to hotels in the area, is from March to November, while occupancy rates drop December to February because of the cold winter.

Jason Schultz, general manager of Chicago Getaway Hostel, sees business prospering because the staff guides visitors toward more authentic experiences in the city.
“We want to provide a Chicago experience and for visitors to experience it like a local,” Schultz said. “We don’t necessarily tell them to go to Sear’s Tower. We try to find random hole in the wall places. Not that we don’t recommend checking out downtown.”