Grupo Habita, the Mexico City-based team behind the upscale Hôtel Americano in New York, is known for taking an unconventional approach to hospitality. Still, its latest property -- Downtown Mexico, a hotel within a 17th-century palace in the Centro Histórico district of Mexico City -- houses a bit of a surprise: the company's first hostel, Downtown Beds.
Downtown Beds occupies the palace's former service quarters. "The space had the bones for a youthful project," said Carlos Couturier, managing partner at Grupo Habita, which created an upscale hotel at the opposite end of the building. "But there was an intimate patio and a rooftop that could be transformed into something cool." The local architecture firm Cherem Serrano kept the original Catalan vaulted ceilings, painted the wooden floors white and installed up to eight bespoke lattice-brick bunks in each room, as well as en-suite bathrooms with rain showers. The patio is now a "chela" garden (that's slang for beer) and the rooftop has a swimming pool and bar that draws a steady stream of locals. There's also a kitchen serving Mexican street snacks, a screening room, table tennis, foosball and free use of bikes.
"People don't come to Downtown Beds because it's cheap; we have had guests pay with Amex black cards," said Mr. Couturier, whose company also plans to open a hostel in Mazunte, Oaxaca, in two years. "They come because it's fun and different."
Clearly, Downtown Beds is not your traditional hostel, nor could its guests be defined as typical backpackers. There are no chores required, no lockout hours or curfews, and linens and toiletries are provided in each of the 17 rooms, whether private or shared. It is one of the latest examples of a global, industrywide trend focused on accommodating design-conscious 20- and 30-somethings who are seeking out the scene (via Facebook, Twitter, Instagram) for reasons beyond saving a buck.
"We're seeing more and more travelers who can afford to stay at hotels, yet choose to stay at hostels for the social experience," said Aaron Chaffee, director of hostels at Hostelling International USA, who noted that many modern hostels are offering the same amenities as hotels: private rooms, concierge service, Wi-Fi, restaurants and bars. And, of course, stylish interiors.
According to Mr. Chaffee, the trend has its roots in Asia, known for its capsule hotels, and Europe, largely considered the vanguard of hosteling. There is, for example, Matchbox, which opened near Singapore's Chinatown in 2011. It calls itself a "concept hostel." Think breakfast all day (Indian rojak or Malay cookies) and pod-style bunks with panels that open and close, in case you'd like to chat with your neighbor.
Meanwhile, outside Munich, the German Youth Hostel Association has tapped the Laboratory for Visionary Architecture, also known as LAVA, an eco-conscious local firm, to transform the circa-1930 Berchtesgaden Youth Hostel. "We were commissioned to rethink what a hostel could be in the age of boutique hotels," said the LAVA director Tobias Wallisser. The first section reopened just over a year ago with natural-wood "cocoon" bunks, energy-efficient wood pellet heating and cantilevered window nooks affording views of the Bavarian Alps, where a resident outfitter arranges mountain biking and ski trips; the next phase, with a bistro and lounge, is set to be completed by 2015, along with LAVA's second hostel, in Bayreuth.
And in Reykjavik, a group of former soccer player and filmmaker friends recently turned a disused biscuit factory -- originally scouted by the Icelandic director Oskar Thor Axelsson for his movie "Black's Game" -- into Kex Hostel. With a retro barbershop, a gastropub and a music venue-slash-art gallery that stages events from the likes of Sigur Ros (or Russell Crowe and Patti Smith, who recently gave an impromptu performance), it has a cult following among travelers and locals.
Increasingly, the hostel is being reinvented abroad -- in places like South America. Inspired by his backpacking trips around the world, 28-year-old Guilherme Perez left a career in banking to create the old-meets-new, minimalist-chic We Hostel Design back home in São Paulo, Brazil. After finding the location -- a whitewashed, early-20th-century mansion in the Vila Mariana neighborhood -- Mr. Perez asked the architect Felipe Hess to design the seven dorm rooms, two private rooms and multiple common spaces (including a "glass room" with wraparound windows and a low slate roof, where guests are invited to leave their mark in chalk) with a black-and-white color scheme. The hostel's creative director, the 26-year-old user-experience designer Rodrigo Marangoni, embedded the space with smartphone-compatible QR codes, allowing guests to download everything from subway maps to, say, a song by the São Paulo rapper Criolo.
We Hostel Design is a family-financed project. However, "investors are starting to realize that there is money to be made in this business," said David Chapman, director general of the Amsterdam-based World Youth Student and Educational Travel Confederation. According to the latest international hosteling survey -- which the confederation produces in collaboration with Hostelling International, Hostelworld.com, HostelBookers.com and others -- the industry is now valued at $34 billion, with the global economic downturn acting as a boon.
That said, the profitability of hostels has gone largely unnoticed -- until now. "There's been an influx of high-profile brands in the market," said Mr. Chapman, "with hostels that are challenging two- and three-star hotels. The difference between these two options is basically the letter 's.' It stands for 'social.' "
The United States has been rather resistant to hosteling, though a number of hoteliers have started experimenting. Last year, in South Lake Tahoe, Calif., the former Joie de Vivre executive Christian Strobel opened the adventure-friendly Basecamp with amenities (communal dinners, fire pits, a rooftop hot tub) meant to encourage guest interaction. Its 50 rooms are all private, but some have bright orange bunk beds and sleep up to eight. More recently, the "straight-friendly urban resort," Out NYC, opened eight hostel-style Sleep Share rooms featuring roomy bunks with personal TVs and privacy curtains; access to the hotel's nightclub, spa and 24-hour gym is included.
In Florida, the Sydell Group, which runs the Nomad Hotel in New York, describes its latest property -- Freehand Miami -- as "the first upscale hostel in the U.S." It opened last December in an Art Deco building a short stroll from the luxury hotels lining South Beach, with 239 beds divided among 63 rooms.
"We wanted a happy, summer camp vibe," said Robin Standefer of Roman & Williams, the New York-based design firm responsible for the hostel's boho-chic interiors (not to mention Manhattan's Ace Hotel). The wooden bunks have Mexican blankets, bolster pillows, linen shutters and built-in nightstands with reading lights and power outlets so you can recharge your smartphone while you sleep. Staff members wear T-shirts by the emerging American fashion duo Timo Weiland, custom beach cruisers are available for rent, and the bar, in an overgrown tropical garden with mismatched vintage furnishings and a swimming pool, is a favorite among Miami's hipster set. Bartenders mix cocktails ($11) using herbs grown on site; there are $3 Miller High Lifes and bottles of Krug for $350 a pop.
"People are generally putting up hotels that have some sort of lifestyle or design element," said the Sydell Group founder and chief executive Andrew Zobler. "It was only natural that would happen in the hostel space, but it really hadn't reached the U.S."
For many travelers, though, a hostel is just a cheap place to crash; in this country, the word tends to connote an environment akin to its pronunciation. Set on changing that perception, the Sydell Group plans to open Freehand locations nationwide (next up: New York). Still, designer uniforms and Champagne aside, there is something to be said for the romance of roughing it -- the journey, not the lodging being the point. If you ask Mr. Chaffee, "a hostel is only well designed if it supports what it was designed to do: provide a social space for travelers to meet up, go out and explore the location and then return to reflect on the experiences of the day."
Farryn Weiner, a 27-year-old New Yorker, is one such traveler. Whether for work (as the global director of digital and social media for Michael Kors) or pleasure, she is on the road about 10 days a month, stopping anywhere from a business hotel in Tokyo to a tented camp at Coachella. Recently, Ms. Weiner booked a bed in one of Freehand's "quad" rooms. "It was like a mix of a hostel and a boutique hotel," she said. "Everyone was sharing tips on where they were going and what they were doing; I walked away with all sorts of connections. For me, at this moment in my life, that's worth more than a five-star spa."
Basecamp, 4143 Cedar Avenue, South Lake Tahoe, Calf.; basecamphotels.com; rooms from $129, including breakfast.
Berchtesgaden Youth Hostel, 6 Struberberg, Bischofswiesen, Germany; jugendherberge.de; beds from 18 euros, or about $24 at $1.31 to the euro.
Downtown Beds, 30 Isabel la Católica, Mexico City; www.downtownbeds.com; beds from 200 pesos, or about $16 at 12.5 pesos to the dollar, and private rooms from 550 pesos, including breakfast.
Freehand Miami, 2727 Indian Creek Drive, Miami Beach, Fla.; thefreehand.com; beds from $30, private rooms from $150, including breakfast.
Kex Hostel, Skulagata 28, Reykjavik, Iceland; kexhostel.is; beds from 2,300 kronur, or about $18 at 125 kronur to the dollar, and private rooms from 9,400 kronur.
Matchbox, 39 Ann Siang Road, Singapore; matchbox.sg; beds from 45 Singapore dollars, or about $37 at 1.2 Singapore dollars to the U.S. dollar, including breakfast.
The Out NYC, 510 West 42nd Street, New York; theoutnyc.com; beds from $99, private rooms from $259.
We Hostel Design, Rua Morgado de Mateus, 567, São Paulo, Brazil; wehostel.com.br; beds from 42 Brazilian reais, or about $22 at 1.9 reais to the dollar, and private rooms from 150 reais, including breakfast.
Correction: February 23, 2013, Saturday
This article has been revised to reflect the following correction: An earlier version of this article misstated the title held by Aaron Chaffee. He is director of hostels at Hostelling International USA, not chief executive.
This article originally appeared in The New York Times.