Lauren and Lee Gonzalez make hostels their business

The hospitality industry has been particularly hard hit over the past two years, losing billions of dollars in revenue. Additionally, rampant inflation, widespread labor shortages and broken supply chains have added insult to injury. While no sector of the industry has been immune to these factors, hostels have proven to be quite resilient in the midst of all these pressures.

Lauren and Lee Gonzalez are the entrepreneurial sisters behind L&L Hospitalitya company specializing in the opening and operation of hostels, including Lolo pass in Portland, Oregon and Local, in Queens, New York. They understand that the operating cost is much cheaper than traditional hotels, which translates into a higher business margin. Additionally, while the sisters have weathered market fluctuations over the past decade and a half, they have found that the budget tourism segment is far more resilient to recession than high-end luxury travel. As the hospitality industry has changed post-pandemic, many hotels are more like hostels with an expense structure and amenities, including limited housekeeping and middle management positions that allow budget hotels and budget hotels to better survive downturns because fixed expenses are more quickly recovered.

“We traveled a lot as students and stayed in hostels abroad that were less than stellar and we just thought we could do better,” says Lee. “By the time we were in college and on our own budget, we recognized that travel is indeed a luxury but so important to personal development and a deeper sense of belonging to the world. youth are key to democratizing travel by making the luxury of travel accessible to a wider range of people.Our dorm beds start at $36 a night.

Lauren traveled and backpacked through South America and Europe throughout college, frequently searching for a hostel to match. She began her career in finance, working in financial sales and trading in New York, London, Milan and Hong Kong. Lee began a career in finance in private wealth management in New York. After completing her analyst program on Wall Street, she partnered with Lauren and moved to Barcelona to pursue her dream of opening hostels.

They opened their first hostel in Barcelona, ​​Spain, in March 2008. They transformed the floor of a historic building in the L’Eixample district into a ten-room hostel that they managed entirely by themselves for the first months. “It was a great learning opportunity and the best way to deeply understand our guests,” Lauren says. “The global recession had started, but we weren’t feeling the effects yet in Barcelona. Young, budget travelers were visiting at unprecedented levels, and customers who may not have considered hostels in the past were looking to us as a good, wallet-friendly option.

They have since moved their operations from Spain to the United States. Because the hostel segment is extremely underdeveloped and overlooked by Americans, they have been able to carve out a comfortable niche in the market with limited competition. Additionally, the hospitality industry has changed post-pandemic as many hotels are more like hostels with an expense structure and amenities, including limited housekeeping and middle management positions that allow hotels budget hotels and budget hotels survive downturns better because fixed expenses are faster. get over.

Lolo Pass has had problems recruiting team members since opening a year ago. When things started to reopen last year, the number of job vacancies versus job seekers was huge. This supply/demand imbalance creates upward pressure on salaries, which makes it necessary to offer more to attract candidates. They also find that many hospitality employees are leaving the industry. They’ve hired ex-restaurant workers who are fed up with the restaurant pay structure and culture. A busy summer season means there’s a lot of hard work ahead of the team, but Lauren and Lee are looking forward to an injection of optimism and fresh energy they expect from Lolo Pass guests.

In the short term, their goal is to regain and perhaps surpass pre-pandemic status. “There have been so many stories about the US travel boom, but unfortunately this recovery is lumpy,” Lauren says. “Drive-throughs, outdoor recreation and more rural destinations may be booming, but urban centers have still not fully returned to pre-pandemic occupations. In Portland, our inbound air traffic is only about 75% of what it was in 2019, and international arrivals are lagging even further behind. Business, group and convention travel are still down. New York City is doing a bit better, but we have yet to see travel normalize to where it was in 2019.”

Lauren adds, “Long term, we would like to bring this adapted hostel model to other major markets in the United States within the next five years. We think travelers to cities like Austin, Denver, Nashville, Seattle and San Francisco would appreciate what we offer, budget accommodations without sacrificing the things that matter most to our people – cleanliness, warm hospitality and inclusiveness, design sense unique and quality food and drink. Our objective would be to finance the acquisition of vacant office buildings or underperforming assets in a few city centers to switch to the Lolo Pass model.