Travel keeps evolving, yet some visions stay stubbornly the same. Take the hostels that hosts hundreds of Camino de Santiago pilgrims each year: big dorm rooms, lockers for personal stuff, and shared bathrooms. What if there were an option that matched hotel quality while keeping the hostel spirit and its social edge?
Room 007 is cited as a clear example of a fresh idea taking hold just as old models seemed settled. The boutique hostel platform emerged in 2012, at a time when many small hosts ran profitable but unevenly quality accommodations.
That gap inspired a renovation. Their spaces now feature private bathrooms, air conditioning, cleaning, and heating. Ignacio Requena, the company founder and CEO, describes the product as a hostel that sits close to a hotel experience but with a social distinction. Hostels, at their heart, are spaces for sharing, meeting, and collective experience, while traditional hotels can feel more solitary. “We took the best of the hostel community and wrapped it in a hotelier-like product,” he explains.
Fewer backpackers
Traditional hostels often stay the same. In Room 007, guests can book free walking tours, tickets to concerts and flamenco shows, yoga classes, and even museum visits. The emphasis leans toward culture and enrichment rather than partying. Prices reflect the product mix: cheaper than hotels, yet sometimes the most expensive in the hostel segment. “It’s expensive for traditional hotel folks, but cheap for hotel people,” says Requena.
Small shifts in management styles also reshape the typical guest profile. “We redefined the lifelong backpacker audience to include families, groups, and solo travelers who seek value and community,” the founder notes. The guest landscape has shifted as well. Today, the majority of visitors is international (about 80%), aged 18 to 40, often university graduates who speak several languages and view travel as a personal imperative.
European leaders
Room 007 began with a single hostel in Madrid’s Las Letras district. After more than a decade, a network spans across much of Spain—Madrid, San Sebastián, Bilbao, Valencia, Seville, and Malaga—and reaches into Portugal (Lisbon and Porto) and Italy (Florence and Rome). The group counts 42 hostels, with 20 more under construction. In 2023, revenues approached 45 million euros, and the founder notes several years of rising sales.
What the boutique hostel approach emphasizes is the widening awareness that a hostel can be a viable, high-quality alternative to traditional hotels. The number of people recognizing this is growing, and those who try it often come back. Growth in 2022 alone reached around 300 percent, illustrating a strong appetite for a blended experience of social space and service quality.
The company closed a 5 million euro round in mid-2023 with Banco Santander’s Smart Fund, building on a previous equity raise of 7.5 million euros. Altogether, the first half of 2023 saw about 12.5 million euros in financing. Room 007 aimed to expand more rapidly by acquiring competitors and leveraging external investment, with Bluesock being a notable acquisition in 2022.
Related news is not included in this article. The boutique hostel model did not originate with Room 007, but it was the first to develop it at scale with professional processes. The founder notes that new competition helps push the market forward, broadening interest and attracting more viewers. Since 2012, the market has grown substantially, offering ten times more options than at the outset.
Looking ahead, the company aims to become a European leader through steady, practical steps. Requena envisions expansion wherever customers travel, toward European cities ideal for solo travel or trips with partners. In the near term, growth plans target Italy, with potential expansions into Milan or Venice. France has not yet been tapped, but Paris could soon join the map of cities under consideration.
Source attribution: Industry discussions with the Room 007 leadership and market observations as reported by company disclosures and press notes. [Source: Room 007 leadership interviews and market reports.]