For a youthful rite of passage or a midlife meander, the hostel remains a staple of low-budget travel. The typical hostel's no-frills barracks-like interiors keep costs down but lack a sense of the city beyond'and fun. London-based, American entrepreneur and veteran traveler Josh Wyatt is harnessing design to create a new hospitality model for his Generator Hostels'shaking up the industry by doing both.

Generator took root in 2007, when an investment company, Patron Capital, for which Wyatt is Hotel & Leisure senior advisor, bought a pair of hostels in London and on Berlin's east side. They were both typical of what budget travel offered at the time: bleakly evocative of a dilapidated student dormitory, with a grotty main-floor pub and harshly utilitarian character. Wyatt began thinking of how to rejuvenate them to address the market more strategically. His solution: invest in a design concept that today's free-spirited travelers want (with social spaces for drinking, dining, and conversation), and leave out what they don't need (fine linens and detailing, excess furniture, even TVs).

Wyatt met Anwar Mekhayech, co-principal of Toronto-based DesignAgency (DA), in 2008, and one year later asked him to be Generator's creative director, retaining DA as its global design partner. The team developed a design manual, forming the DNA of what would become the Generator brand. Working with local architects and artists over the following three years, the team bought and renovated existing buildings in Dublin, Hamburg, and Copenhagen. Then, in 2012, Generator brought in a London-based graphic-design firm to revamp its visual identity while revving up the design quotient of the hostels themselves'with a plan to continue adapting new properties in centrally located older structures. Generator Barcelona opened the next year with an added hotel-like component of private rooms. Its dramatic curvilinear staircase and dining-room lantern installation by local artist Julie Plottier created industry buzz. The rebranding helped Generator increase its number of guests by 33 percent, with 5,200 beds across Europe in 2013 and 6,080 this year, with similar hostel/hotel destinations in Berlin's Mitte district, Venice, and, most recently, Paris. When two more open in Rome and Amsterdam next year, capacity will rise to 6,890 beds in 1,656 rooms.

Generator Paris is the largest property to date, with 916 beds in a transformed 1985 office building in the city's 10th Arrondissement. Its interiors by DA are playful nods to the local culture, such as a French-bistro-meets-Ikea dining room. Though more sumptuous than the typical Parisian hostel, it has accommodations for as little as $27 a night.

The key to the pricing structure and communal spirit is Generator's focus on areas of social interaction, explains Mekhayech. Public spaces are lavishly furnished (by hostel standards) and tailored to each locale. Most have 'edgy' features like exposed columns and ceilings, as well as social amenities, from dining halls to discotheques. 'It's important that we have that sense of fun,' says Mekhayech. Shared bedrooms boast a cleanly minimalist design that Generator keeps standard from place to place. Rooms, whether two- or eight-bed, come with en-suite baths. But certain hotel staples are missing. 'When you stay somewhere for just a few days,' asks Wyatt, 'do you really need to unpack all your belongings into a closet or dresser?' On the other hand, the sleeping areas do have Wi-Fi and USB ports'the new staples of travel.

Next, the North American hostel industry may get the same transformation. The Generator team is currently exploring sites in Los Angeles, Miami, New York, Washington, D.C., and Toronto. Says Mekhayech: 'We want to get to the point where you come to a new city, you automatically ask, where's the Generator?'

Design Team:
DesignAgency— Anwar Mekhayech, co-principal and creative director at Generator; Matt Davis, Allen Chan, co-principals

Completion Date: Dublin 'July 2011; Hamburg ' January 2012; Copenhagen ' June 2012; Barcelona ' May 2013; Venice ' September 2013; Berlin Mitte ' October 2013; London ' March 2014; Paris ' February 2015