CASE STUDY: A Pandemic-Proof, Flexible Business Model for the Youth Hostels Association

Making a seige engine in an activity at Castleton YHA. Courtesy of YHA, England and Wales.

Introduction

The Youth Hostels Association turned ninety in April 2020 – a remarkable moment both in its history, and in the history of the world at large. With the pandemic in its earliest stages, the charity had recently closed down all its hostels for the first time since its founding. At the same time, its central charitable objective – giving young people, especially disadvantaged young people, access to the countryside – was more important than ever.

The previous year had been the charity’s most commercially successful yet. It was proud of its model, which bucked the trend of underfunding and need found in many Not-For-Profits. However, there were still gaps in its strategy, particularly in the face of the unfolding Covid 19 crisis. It needed a new, flexible business model better tuned to the pandemic.

Forced to investigate and reconcile the relationship between its charitable purpose and business model, it found new financial solutions while also refocusing its efforts to better the lives of young people. Its belief that ‘where you go affects who you become’ was conceptually true for YHA itself, as it adjusted outside of its previous comfort zone, just as it is practically true for its visitors.

About this case study

This case study is based on a talk by James Blake, Chief Executive of the Youth Hostel Association, on behalf of Clore Leadership, for the Rebuilding Heritage Programme. It was one of three covered in the webinar ‘Values Led Leadership for Change‘, which you can watch here.

The YHA in a nutshell

The YHA aims to improve the physical and mental health and life skills of its visitors, particularly through residentials connecting them with nature and heritage. Open to all, it especially wants to reach young people with challenging lives.

Of the 150 YHA sites across England and Wales, many are situated in national parks, and much of its accommodation is in heritage buildings, including medieval castles, stately homes and an Elizabethan manor.

In pre-pandemic 2019, it attracted two million stays from one million guests, 140,000 members, 1,000 young volunteers and 3,000 school trips.

Creating a New Vision and Mission

Reaching the children who have never ‘been to a beach, visited a museum or rolled down a hill…’

In 2020, after some years of thinking and consultation, the YHA launched its new vision and mission:

Our vision: Everyone has access to the benefits of adventure, for the first time and a lifetime.

Our mission: To enrich the lives of all, especially young people, by providing brilliant hostel stays and experiences that improve physical health, mental wellbeing and life skills.

Underpinning this, was the determination to seek more opportunities for collaboration – so that in seeking to end by 2030 the inequality that means that some children have never ‘been to a beach, visited a museum or rolled down a hill’ it would have allies working on a scale to make that possible. It also aimed to better balance the need to make revenue against those aspirations. These values shaped its choices as it aimed to create a more flexible business model for the pandemic.

Courtesy of YHA, England and Wales.

Pandemic: ‘The Most Severe and Significant Crisis Ever to Hit the YHA’

From 2020 to 2021, YHA lost around 80% of its income – or around £40m. In the periods when hostels were legally permitted to be open, its dormitory model – bringing lots of people from different households together in a small space – put it at even more of a disadvantage than the accommodation sector as a whole. It could not book its spaces in the same way as it had before.

Even now, from 2021 to 2022, income is around 60% of pre-pandemic, and the YHA is still expecting a loss.

Additional Resource

Covid Stories chronicles YHA’s journey from March 2020 to February 2021. These are real people’s stories, and the collective stories of all who are involved with YHA. They are stories of resilience and hope, of the contribution that YHA has made to society through a devastating year.

A Flexible Business Model for the Pandemic

Making an Emergency Leadership Plan

“Keep your strategy constant in a time of change”

After closing down the whole YHA network ‘literally overnight’, its senior management team swung into action to make an emergency plan. It established an 18-month framework to help manage the pandemic’s effects on its business. Although this flexible business model has been revisited three or four times, it has essentially held good.

Two guiding lights underpinned the decision-making:

• YHA’s strategy and focus as a charity.

• Its cashflow and financial position.

The charity had made difficult decisions in the past – for example whether to close some hostels in order open new ones elsewhere. In doing that it had had to overcome some shades of opinion in the organisation which were resistant to change. However, the pandemic accelerated that process, as it forced senior management to think about what was most central to its work – more on this below.

YHA Whitby Garden Volunteers - Wendy

There were four phases to YHA’s route through the pandemic:

1. Closedown for lockdown. In the early stages of the pandemic, no one knew just how long the lockdowns would last or what course events would take.

2. Repurpose. In the period when hostels could not be booked and used as usual, YHA found other pro-social uses. For example, in Bristol it housed key workers, homeless people and those fleeing domestic violence. As well as providing a little income in tough times, it also provided new contacts and possibilities in the longer term.

3. Reboot. In practice, the above strategy meant that YHA rebooted three or four times over 18 months. It asked the question ‘how can we make the best of things in the light of Covid?’. For example, where it was impossible to run a dormitory, how could more rooms be kept open – and what were the options in terms of offering accommodation in the grounds?

4. Renew. From April 2020 onwards, the YHA also began to map out its long-term renewal and survival strategy. This partly addressed recovery from the pandemic but was also seen as a chance to renew its model and network. This includes reappraising which hostels should exist, in which locations, and what kind of central support would be needed to deliver that. In this respect, the pandemic was an opportunity as well as a crisis – a chance to act boldly an radically, because ‘business as usual’ was simply not an option.

Additional Resource

Read about the Youth Hostels Association’s 10 year strategy for connecting people and places.

Rebalancing who Gets Heard

The YHA has a number of very loyal older members, some of whom don’t find change easy. That might mean protest when a hostel has to close, even when that is the right decision in the big picture. In certain circumstances, it can be a good idea for a leader to act in the public interest, even if it means going against the wishes of its membership, or the results of its latest survey.

YHA has sought to amplify the voices of the younger people that it was primarily created to serve. In the pandemic year, it set up a Youth Advisory Team with contact with the Board, operations and some strategic decision making. This balanced out the voices in the chorus and made sure that decisions were in line with what the organisation had originally set out to do.

In contentious debates, people sometimes used YHA’s history as a way of arguing against change – but perceptions of the past are not always in line with the facts. Since its inception in 1930, it has often been quite a radical force – the current leadership have aimed to think about how that radicalism should manifest in a 21st-century context.

YHA Bristol. Courtesy of YHA (England and Wales)

What Did YHA and its Leadership Learn?

• The organisation’s strategy and values didn’t change and were in fact helpful in getting through the pandemic, despite the fact that the original business plan and KPIs (Key Performance Indicators) were completely off base in the circumstances.

• Robust governance mattered, but the question of what was a strategic matter and what was operational ceased to be so distinct. Functioning relationships also became much more important – it was crucial that there was mutual respect between the Chair and Chief Executive as they had some very difficult conversations.

• Though YHA was rightly proud of its financial model, it became a weakness during Covid. This highlighted its limitations and pushed it to engineer a more diversified and imaginative approach. Creating a flexible business model for the pandemic was essential. Being a charity suddenly became critical for generating income from new sources, including from Government in the shorter term.

• There were a number of opportunities implicit in the crisis and YHA made choices that it would have been nervous about in other circumstances. Experimentation is a core value in a crisis, and the group was able to reconsider its culture, model, size of estate and its purpose, in an environment where people understood why any one of these things might need to change.

• Some of the most difficult decisions involved redundancies as YHA shrunk the size of its staff, including the senior team. The weight of this was exacerbated by having to tell people the news over Zoom, often despite being exemplary employees. Being unable to meet in person and having these conversations from home also collapsed the division between public and private space – for leaders and employees alike. Although one of the most difficult aspects, James said these decisions are never better for being put off.

• The YHA gained new opportunities for influence within government and the media. The crisis was acute and immediate – how do you deal with the fact that two million children have no access to green space? It was a good moment to influence the policy environment.

• There was an opportunity to see previous rivals in the same business space as collaborators rather than competition – with Covid as the common enemy.

• It’s important not to overstate the benefits of crisis – despite the opportunities for renewal, teams are smaller and more exhausted by the experience of the pandemic, and in many cases have ended up taking on a larger workload than ever before.

• Leading can be an exhausting experience in these circumstances – James describes it as the hardest period in his career. He says that he needed to find a balance – on the one hand being relatively open about the challenges he faced, but also knowing that staff were looking to him for security, stability and calm and a sense of optimism – sometimes it is the job of the leader to project that, even when you are not feeling it.

Like many organisations, as of early 2022, YHA is not yet financially out of the woods – but with a strategic path, new collaborators and connections and renewed purpose, it is confidently planning for many years ahead.

This article was written by Kate Smith of Goosegrass Culture.

Adapted from content delivered in partnership with:

Clore Leadership
JC Niala, Acting Keeper of Anthropology, Horniman Museum and Gardens
Sarah Robertson, Communications and Special Projects Director, Bristol Beacon
James Blake, Chief Executive, Youth Hostel Association

Follow the links below for a detailed case study from each speaker – or watch the original webinar here.

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