Budget travel booms as hostel bookings jump by 14 percent

While luxury and business-class hotels are doing everything they can to eke out a break-even balance sheet in this red-ink economy, there's one travel category that has seen a boom in bookings. A mighty boom, in fact. Hostelling International, one of the most important operators of affordable international accommodation, say that in 2008, annual bookings shot up by a whopping 14 percent.

Hostels have long one of the travel world's most neglected categories, partly because Americans don't live in a culture that values travel much. But nearly every other Westernized society does, and if you grew up in Australia or continental Europe, it's nearly a cultural expectation that you take some time in your 20s to roam the planet and see how everyone else lives. Those nomads on tight budgets have been the lifeblood of hostels.

That is, until the economy crashed. Now, vacationers of all income brackets and ages are turning to them. And it makes sense. At many hostels a bed costs around $20 a night, so booking at a well-run hostel instead of a $300-a-night luxury hotel can suddenly make a dream trip possible.

Conventional wisdom would have you believe that under the circumstances, most people would be staying home, or at least close to it. Yet it would seem that people aren't staying home; they're just spending their budgets more wisely. Hostelling International, which standardizes its properties in some 80 countries, reports that overnight bookings in 2008 were worth some $31 million. That's a whole lot of visitors. HI says it equals about 1.4 million overnight stays.