Rejuvenate your category, like Generator Hostels

Generator is a great example of a brand rejuvenating a whole category, in this case hostels.

My memory of hostels is the pretty basic and functional places I stayed in whilst Inter-railing round Europe as a teenager.

In contrast, Generator hostels look more like boutique hotels. They have cool bars, buzzy nightclubs and roof-top cafés, as CEO Fredrik Korallus explained in an interview in BA’s Business Life magazine. The fast-growing chain is already in 12 cities, with more planned.

1. Build on customer insight

Like all great brands, Generator is built on a strong foundation of insight. Generator’s target clientle visit a city to explore, socialise and party. In other words, they don’t spend that much time in the bedroom. “Here, the bedroom is the least important part,” Fredrik says. “It’s got to be clean and safe, but guests sleep then get on with life.”

2. Create a clear business concept

Flowing from the aboveinsight, Generator have defined simple but powerful business concept: ‘Experience and design-led hostels’.

This simple description drives everything the business does. The focus is on the shared spaces, rather than the bedrooms, as Fredrik explains. “We have a 70/30 mix of shared and private rooms and best a lot more in social spaces than in rooms.”

3. Create a compelling value proposition

How can Generator create a great customer experience, offer competitive prices with shared rooms priced under £30 and still make money? The key is ‘value innovation’:

  • Deliver more on things their customers really want
    • Generator over-invest in social spaces
    • Fast wifi is provided
    • Each bed has a charging socket and USB port.
  • Cut costs in other areas
    • The rooms themselves are functional, though bright and colourful (see below)
    • The choice of locations also seems smart. Generator hostels are in up-and-coming places such as Canal St Martin in Paris. The locations have street cred but not a prestigious city-centre address, so should be cheaper to lease or buy.

4. Deliver a brilliant product

The devil is in the detail, as with all service businesses. And Generator hostels do a great job in creating shared social spaces with a true ‘wow’ factor. For example, Generator Paris Café Fabien overlooking a garden,  Le Club, inspired by the Paris Metro, and Khayma Rooftop bar on the 9th floor, with awe-inspiring views of Montmartre.

5. Design an experience worth sharing

A key benefit of a truly distinctive product or service is that you create an experience worth talking about. Generator hostels have been designed with social media in mind. The decor and food are ‘Instagrammable’. Even the staff generate PR, with Elle magazine writing, “The front-desk staff look like they DJ or design jewellery in their spare time.”

In conclusion, Generator hostels is great example of true business innovation to rejuvenate a category. Fredrik and the team have highlighted a neglected category and built on true insight to design and deliver a highly distinctive customer experience.

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