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The Freehand in Miami

The youthful crowd at Fiesta Gracia Bar, a notunchic watering hole in Barcelona's Generator hostel, is tossing back €5 mojitos under a riotous canopy of citrus-coloured lanterns. The adjacent double-height lobby – a wood pavilion that resembles a birdcage – has been done up in equally funky style. Chairs and textiles are by the Spanish design firms Woouf! and Expormim; a vintage Derbi motorcycle sits next to a 1972 Gufram cactus coat rack. It is all the handiwork of the Design Agency, a Toronto studio run by Anwar Mekhayech, Allen Chan and Matt Davis. And it's just one of the many properties smashing the long-held (and mostly accurate) notion of hostels as shabby dumps

A bunk at a Generator hostel – the brand operates nine locations in seven cities across Europe – goes for $12 a night, a private single room for as little as $40. The Design Agency is revamping both existing and new locations with the same bold aesthetic it has adopted for Toronto hot spots such as Soho House and Momofuku. But it's not just its attention to design that has made Generator a leader in the "haute hostel" (or "poshtel") field. "The key is that Generator has a very cool group of people in London who oversee events, brand associations and staffing," Mekhayech says. "That's what creates the soul."

Of course, Generator and its ilk – the Freehand in Miami and Manhattan's Pod 39 and Pod 51 are other poshtels of note – conform to the traditional hostel model of not providing room service, concierge desks, spas and, in some cases, even check-in. But they have reimagined the genre to such a degree – offering not only inexpensive rooms in desirable locations, but also dynamic communal spaces, high-tech everything, craft cocktails and novel dining – that everyone from hip millennials (their target market, at least on paper) to business travellers and families are crossing their thresholds. Web sites such as poshpacker.com, which vets the globe's best rooms under $100 a night, have sprung up in their wake. And as Generator did with the Design Agency, they're enlisting top designers to outfit their growing ranks.

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In Florida, the Freehand was designed by Roman and Williams, the firm behind New York's Ace Hotel. Located in a historic 1930s property, the Miami hostel has been decked out with mid-century-modern furniture, features a courtyard adorned with Curtis Kulig graffiti art and serves up artisanal cocktails infused with herbs from its garden. Shared rooms start at $35 a night, private rooms at $150.

At Pod 39 and Pod 51 in New York City, meanwhile, rain showers, LCD flat screens and iPod stations abound. Salvation Taco, a casual restaurant in Pod 39, boasts a menu created in part by chef April Bloomfield of The Spotted Pig fame.

"Even properties that aren't hostels per se are mixing the hotel/hostel thing now," Mekhayech says, alluding to how the trend is spreading. And indeed, low-cost high-design rooms seem to be everywhere, from the Mama Shelter mini-chain (designed by Philippe Starck) in France to the Jane in New York to Singapore's Wanderlust and Berlin's Michelberger. Modelled on Japanese capsule hotels, where rooms are the size of first-class airplane suites, Yotel was launched in 2007 with airport locations in the U.K. and last year unveiled a midtown Manhattan address; its guests check in at an automated kiosk while Yobot, a robotic baggage carrier, handles the luggage. And at Citizen M in Amsterdam, Glasgow, Rotterdam and London, original Arne Vodder chairs, banks of Mac laptops, a well-stocked commissary (there's no room service) and compact guest rooms as efficiently designed as those on an ocean liner are the norm.

The fact that a growing number of travellers seems to be keener on good design and high-tech amenities than grand rooms and even grander rates has not been lost on the big chains, many of which are introducing new budget offshoots with trendysounding names. Last year, Wyndham opened TRYP in Manhattan; rooms there are equipped with bunk beds that sleep up to six. Thompson Hotels's two Tommie locations, slated to open in New York next year, promise "space-efficient crash pads" (read: very small quarters) and a "gourmet grab-and-go marketplace" (read: no room service)." And having commissioned IKEA to oversee interiors, Moxy Hotels (owned by Marriott and aimed at "millennial global nomads") will open its first location this year in Milan, followed by a 150-property rollout over the next decade.

"Design," Charles Eames once said, "addresses itself to the need." And if poshtels are any indication, the need among many globe-trotters is a wired room that's reasonably priced but doesn't skimp on style.

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