No hotel for SXSW? WeHostels has the hook-up (for that, and overbooked events around the world)

By Erin Griffith , written on February 22, 2013

From The News Desk

The WeHostels iPhone app helps backpackers book hostels on the go. It's social, too -- users can connect with other travelers as they're hopping from city to city.

This week, if you, like me, are a last-minute traveler with an impossible SXSW budget, WeHostels is your new best friend. The app launched a new section called "Hot Trips," which includes hook-ups to hostel beds during events that are impossible to secure lodging for. The first Hot Trip to be featured is, appropriately, South by Southwest.

WeHostels booked the entire Firehouse Hostel in Austin during SXSW Interactive. Last-minute techies on a tight travel budget can use the app to snag a hostel bed. (Download here.) Five nights in downtown Austin for $340 is a ridiculous steal. They're calling it the Hackers Hostel; I'm imagining it'll be an even weirder social experiment than the situation I had last year, which involved an air mattress, 12 New York startup founders and a giant suite in the Driskill.

The Hot Trips section is not just a shameless play for SXSW-related downloads. WeHostels has planned to release special last-minute access to German hostels during OktoberFest, Irish hostels during St. Patricks Day, and Spanish hostels during San Fermin. The app will adding beds during covetable events from big music and sporting events to national festivals.

The idea is to inspire trips around these events while giving users the tools they need to make the a last-minute trip happen, says founder Diego Saez-Gil. WeHostels will also add ticketing to its Hot Trips events where it makes sense.The app is now available around the world, but limited to English and dollars. Adding currencies and languages is next on the to-do list.

One of WeHostels' biggest advantages is that the dominant player in the hostel booking space -- Hostelworld -- has been slow to embrace social. The site is giant and certainly a dominant player with apps on both iOS and Android. But it's also a massive company owned by a private equity firm. It has completely ignores the social aspect of backpacking. WeHostels is mobile first, with a social media flare. The site has even partnered with HostelWorld and to bring the total number of hostels in the app to 60,000.

It's social travel, and it's inspiration, but it is almost the exact opposite of the social travel inspiration shake-out I described late last year. That's because WeHostels is first and foremost a booking business. It's user base of more than 100,000 backpackers depend on it to find a place to stay in their next city. WeHostels books at least 30 beds per day, a number which has doubled every month for the last four months, Saez-Gil says. The app takes a 10 percent commission on the bookings.

That doesn't add up to a huge sum yet, but it shows the company is capable of bringing in revenue and building a sustainable business. WeHostels is backed by $1.2 million in venture capital from Ventech, Quotidian Ventures, CAP Ventures, TA Venture and a long list of angel investors.

The incoming revenue, to me, gives WeHostels more of a fighting chance than a generic travel "inspiration" site that hopes to amass a large, engaged audience of travel inspiration sharers, and then, if they can do that, sell them bookings. At least WeHostels already has the bookings; if it can inspire more bookings by coming in damn handy at the last minute, then that's even better. As I wrote when the site raised its funding round last year, the backpackers that targets probably don’t need inspiration -- they need tools. They wouldn’t have embarked on extended journeys around the world if they weren’t already inspired to see it.

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[Image courtesy Visualist Images]