This seems like utter madness to me.
The YHA have debts of £34 million and plan on closing 32 hostels over the next 3 years to recover some of the debt,some in very popular locations in England and Wales.
However they now plan on spending £3.2 million on 1 brand new hostel.
Fair enough if they are losing so much money a year then do something about it but spending all that extra money on 1 new hostel is stupid.
Details of the new hostel
The other mad thing is to join the YHA costs £15.95 per year or £210 for a Life Membership
Yet to join the Scottish equivalent where you get the same benefits costs you £8 per year or £60 for Life Membership.
Now which would you choose
After going to New Zealand last year and finding an organisation similar to YHA that being BBH they difference in my eyes between the two was massive.I had no hesitation in joining BBH.
Its just a shame they only cater for New Zealand.
Reading that, it doesn't seem all that mad to me. They're looking to reopen seven of those hostels in better locations (so they can offer better quality) in the same neighbourhoods. Yes, it's a real shame that so many of the smaller hostels will be abandoned - these often have so much charm - but if they cost more to operate than they bring in, and people just don't stay there...
The cost for the new hostel is quite high, but obviously they expect to be able to make it back. With 12,000 overnight stays a year, at 15 pound per night (obviously more for doubles e.a.), that earns itself back in 18 years. A bit long, perhaps, but that doesn't sound unreasonable for what will obviously be a flagship hostel for the organization.
Anyway, they're looking to open eight new hostels total with "all that extra money", not just the one.
With 12,000 overnight stays a year, at 15 pound per night (obviously more for doubles e.a.), that earns itself back in 18 years..
That would be a fine calculation if that was their net profit on a nights stay. It'll probably be closer to the 2 pound mark (if that!).... and thus take over 130 years to make back.
That's not really how you should calculate this though, because it's not a dry investment which is written off, but (I trust at that rate) they will own the building/land which has a value in itself and thus the investment could be justified. Half of the bill also seems to be being footed by someone else.
Debts of 34 million pounds, with the amount of properties they own, is nothing in my opinion, provided of course that they are breaking even or running at a profit year to year. In other words, if they own 90 million pounds worth of property and have 34 million worth of debt, that's not a bad scenario to be in (I'd take it!!). Of course if they're losing money year in, year out, that own capital won't last them forever either....
Still sad considering their closures, but sometimes businesses have to do these things. In my opinion, they'd do well to grow up and smell the modern day business environment and not hold on to this ancient 'membership' thing. With less and less hostels being a part of organisations, and most people not really caring what organisation the hostel is a member of, as long as the hostel is good, the membership fees just seem more and more ridiculous.
Oh well, they'll realize it one day; just mark my words