See Venice without pushing the boat out

With it's enviable waterfront location, the city's first major hostel is the perfect base for bright young things – a pocket of daring design that won't hurt the pocket, says Samuel Muston

Sitting cradling a spritz in the lobby of the new Generator hostel in Giudecca, Venice, I found myself drifting into a daydream. It was a short-lived reverie, however, interrupted by the bewildered face of someone dragging a bag. "Can you help me please," the bewildered face asked. I can, I said, putting down my drink. "Great! Do you know, er, where the hostel is?"

This was the perfect question. Certainly as far as Generator's backers are concerned, anyway. Because the questioner assumed, as I had done when I arrived two days earlier, that there was no earthly way that this was a hostel. I mean, how could it be with those bay trees at the door, the Philippe Starck chairs and those dangling lamps that look like émigrés from a Mayfair restaurant? The Generator hostel, you see, is not very hostelly at all.

Just across the water from San Marco, Generator Venice is an extraordinary proposition. It is the Renaissance city's first major hostel; yet when you push through the heavy bronze and glass doors and step inside, it seems to owe more to Ian Schrager and André Balazs, the boutique hotel apostles, than the dark and somewhat distressed hostels that I'm familiar with. The discordance between expectation and reality is quite deliberate, though, says Carl Michel, Generator's executive chairman. "We have deliberately set out to redefine what is understood by the word 'hostel'; we're creating the world's first 'boutique hostel' brand."

Of course, the term was not minted by Generator. Boutique hostels have long been a feature of cities such as Valencia, Lisbon and Barcelona and many places beside. But they have tended to be one-offs. Generator, with its seven hostels in many of the hot-spots of Europe, has reasonable claim to be the first multi-national chain.

Now, at this point, you might be thinking the term "boutique hostel" sounds like the most egregious oxymoron; an unhappy elision of two very different concepts. Yet Generator does seem to straddle both categories. Its 240 beds, split across 36 rooms – the smallest has four beds; the biggest 16 – are all priced at the standard hostel level, ranging from €10 to €34 per person per night. The atmosphere – young people mill around chatting, drinking and surfing the free Wi-Fi – says hostel, too. Everything else does not.

Take the design of the place, for starters. Anwar Mekhayech, designer of Soho House Toronto, is in charge of the interiors of all the Generator hostels. He travelled around Italy in a pick-up, buying furniture for the Generator Venice. "I went everywhere: from flea markets to antique dealers," says Mekhayech. "We needed to be sympathetic to the two-centuries-old building, to ensure the city's Fine Arts Committee (FAC) passed the design."

Designing a building which is "sympathetic" to Venice, is not as easy as it sounds. Although the building Generator is housed in is an undistinguished grain warehouse, Mekhayech still had to observe the tight Venetian planning laws, which meant no changes to the frontage, maintaining the internal exposed beams and keeping the traditional leaded windows. Getting permission to put two plant pots at the entrance took two months.

The result is impressive. A vast antique fireplace, bought from a salvage yard in Verona, is set off by wallpaper from Flavour Paper in Brooklyn; a giant apothecary's desk on the back wall came from Milan and is lit by lamps brought from Paris. "It is meant to be fun and romantic," says Mekhayech. "I didn't want anyone to walk in and think they were in a Hilton-esque chain; it had to have a sense of place," he says.

The décor is not the only thing that sets it apart. The location, a short walk from the Guggenheim and a dozen or so doors down from Elton John's house, also pushes it into realms of desirability that other hostels can only daydream of. But then this is the Generator way.

The location of its other seven hostels, in Barcelona, Copenhagen, Dublin, Hamburg, London, Berlin Prezlauer Berg and Berlin Mitte, were all chosen on the basis of their proximity to major transport hubs and attractions. "We are not interested in being the old youth hostel at the end of the Metro line," says Michel.

Since the brand, which started with just one rather dire hostel in London (now being refurbished) and another in Berlin, was taken over by investment group Patron in 2007, its new acquisitions have been anything but end-of-the-line. Like the design-led Palmers Lodge hostels in London and Bunk Design in Istanbul, the focus has been on finding buildings with character and backstory, in areas which are convenient for tourists.

The superb location of Generator Venice is a case in point. From the windows of our ensuite four-bed dorm, the whole golden vista of the city seems to open up before us. It feels like the landmarks – St Mark's Basillica, the Doge's Palace, the Santa Maria della Salute – have been arranged for the benefit of this hostel. Even better than the view, though, is the quiet. It is a safe enough distance across the Guidecca Canal from the throngs of tourists decanted each day from their cruise ships on to San Marco. Real-life Venetians promenade along the waterfront; cafés don't charge €4 for a coffee; you can eat dinner without remortgaging your house. It is a sort of bliss – or so it seems to my 26-year-old self.

Would it be quite so attractive if I were 20 years older? Michel concedes that the target demographic is 18 to 35, but insists that Generator clientele are morphing, albeit slowly. In Berlin, he says, business travellers are, in growing numbers, choosing to stay. And its two new properties, set to open in 2014 in Rome and Paris, will have some rooms tailored to families.

"People increasingly recognise that getting a room in a hostel is not a distress purchase made when you are 21. It is no longer inconsistent behaviour to stay one night in a five-star and another in a hostel," says Michel.

It is an interesting notion. Though on my visit, everything from the late dinners (10pm, late by Venetian standards), through to the collaboration with international DJs and local artists, seems to be calibrated to the gap-year traveller. This is not to Generator's detriment, though. Venice is groaning with hotels targeted at families and those earning a professional salary; in that morass, youth travellers have largely been overlooked.

On my last night, two Kitsuné DJs played in the lobby, while an art installation flashed a synchronous kaleidoscope of light across the lagoon. Out front, I see my formerly bewildered friend again, this time giving a little tour to a new-found acquaintance.

Generator's executives like to talk big about building homes away from home, and bringing people together, conversation that usually brings out the cynic in me. But on the basis of my weekend there, they may just have succeeded.

Travel essentials

Getting there

Venice Marco Polo airport is served by British Airways, easyJet (0905 821 9000; easyJet.com) and Monarch (0871 940 5040; flymonarch.com); Venice Treviso is served by Ryanair (0871 246 0000; ryanair.com).

Staying there

Generator Venice, Fondamenta Zitelle 86, Venice, Italy (00 39 041 877 8288; generatorhostels.com). Rates start at €10 per person per night.

More information

www.italiantouristboard.co.uk