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No architectural types register shifts in popular taste and fashion more quickly than urban, style-conscious dwellings meant to be lived in for just one night. If you want to catch up on the latest trend in interior design, for example, there's no place better to start than the lobby or lounge of the newest boutique hotel near you.

Hostels, on the other hand, have long been another story. For most of their history since the end of the Second World War, when a backpacking adventure in Europe again became a rite of passage for young Canadians and Americans, these shelters have been bare-bones and barracks-like dormitories for kids on the move. Nobody expected them to be any more luxurious than that.

But in recent years, the pan-European Generator chain of temporary digs has been transforming the reputation of its facilities from spartan to chic, and even cool. And there's a Canadian angle here, insofar as the outfitting of Generator's hostels (which also feature some low-cost hotel rooms) has been handed off to the Toronto-based Design Agency. Partners Allen Chan, Matt Davis and Anwar Mekhayech have so far done Generator interiors in Dublin, Hamburg and Copenhagen. The firm's latest handiwork, executed by team leader Matt Davis, went public earlier this week in Barcelona's culturally various Gràcia district.

Each year in August, this neighbourhood hosts the celebrated Festa Major de Gràcia, the city's biggest open-air party. Along with many other activities, the eight-day event pits street against street in a contest to determine which thoroughfare is sporting the most exuberant decoration. As Mr. Davis explained to me last week, it was with this exciting civic spectacle in mind that he went about crafting the interior of the Barcelona Generator.

If snapshots can be believed, Mr. Davis has created high-impact public spaces that successfully capture the verve of the hostel/hotel's hometown and that will likely have keen aesthetic appeal for budget-minded travelling folk who are hipper these days than they used to be.

Coming off the Carre de Còsega into the hotel lobby through a wall of glass the width of the eight-storey former office building, visitors will find themselves in a festive jam-up of colours and shapes. The predominating hue is orange on orange, accented by blue-sizzling red or fruity or earthy oranges on the furniture and in the busily patterned floor tiles.

Overhead, the sunny block-party theme is reinforced by a thicket of some 300 orange and white hanging lanterns shaped from stretched polyester, taffeta and other translucent materials. Mr. Davis said that Barcelona artist Julie Plottier made this delightful lighting installation under the influence of the lamps that festoon local streets during the Festa Major. Other striking elements in the lobby design include the intricate, over-the-top wall coverings by Tres Tintas Barcelona, a company that specializes in the manufacture of eye-dazzling papers.

After reaching into the local history of fun and décor for the hotel lobby, Mr. Davis looked in another direction – the city's marine past – while thinking about the reception area of the hostel. At the centre of this part of the building, a large, dramatic swirl of long timbers is meant to resemble the skeletons of boat hulls and recall Barcelona's ship-building traditions. Here, as in the hotel lobby, the designer has let himself be guided by local sights and sounds and memories, which have proved to be fertile sources.

"We were struck by Barcelona's rich planning, architecture, art and design," Mr. Davis said, "and how its historic treasures are now woven with its energetic contemporary culture, fashion and graffiti. We were also inspired to become part of the trajectory of artists and designers who have, over time, responded to this city's vibrancy and beauty."

Unfortunately, he believes, many of this Generator's guests – chiefly people between the ages of 18 and 35, wanderers over long distances and among numerous European cities – will take in only a fraction of Barcelona's "vibrancy and beauty." They will, instead, merely catch the highlights, such as the famous, strange pilgrimage church of La Sagrada Familia and other masterpieces by the Catalan architect Antoni Gaudí – and overlook the street-level vibe Mr. Davis has come to admire over the three years he has been working on this project.

Hence, the intentions that have informed his development of the Generator design: to cultivate local artists and artisans and styles – "to pay homage to the experience of the city, which is larger than just a tourist destination," he said, "to open your eyes to it." With this work, Matt Davis has given to a fine city an image of its best self, which is no more than we should expect from every designer of the rooms we pass through on our travels.

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