The 49-bedroom, 244-bed Hoax Liverpool hostel will open in the Kansas Buildings development within the Matthew Street quarter of the city just yards from the world-famous Cavern Club.
Targeted at young consumers under the age of 35, the venue will include a number of en-suite rooms and will feature a ground-floor F&B operation called Hopskotch Street Kitchen & Bar. The restaurant will offer international street food delivered through a menu of sharing dishes and small plates.
A joint venture between hotel operator Starboard Hotels and real estate firm Union Hanover Securities, the Hoax brand has been backed financially by Bridgepoint Ventures, Equity Bridge and IPIN Global.
Speaking to BigHospitality, Eric Jafari, founder and chief executive of Bridgepoint Ventures, revealed the plan was to open a London venue by the end of the year which would be closely followed by other city centre locations.
"Consumers, especially those of the age of 35 and under, have developed from aspirational spenders to value seekers," he said. "The hotel industry has misinterpreted this shift as being a rise of the budget sector. However the reason why the budget end of the hotel industry has profited is because of the lack of options."
Citing Citizen M and Motel One as examples, Jafari said consumers were now demanding more for their money.
"It has been historically assumed that the only means to deliver good F&B and design-led hotels is through a high-cost fit out. Consequently high cost in development equates to high costs to the consumer.
"A combination of access to easy personal debt and high per capita income fostered strong performance for these concepts but a new type of lodging experience has emerged: affordable luxury."
Hoax will be the latest hostel brand to be launched by Starboard Hotels which currently operates the Smart City Hostel in Edinburgh. The Wembley-based company also manages a number of hotels and is thought to be looking for hostel locations in Glasgow, Bristol, Brighton, Bournemouth, Newcastle and Manchester.
Explaining the reason for developing a luxury hostel brand, Jafari said recent studies showed that the average hostel consumer is no longer a student on a budget but a young professional with disposable income.
Liverpool has been the location for a number of new hotel brand launches over the last year and Jafari admits it will be a difficult city to succeed in, however he said the venture was not an attempt to eat into the already existing hotel or hostel markets but to create a new destination brand representing the latest in social trends.
"We want to increase Liverpool's lodging market share by creating such an exciting experience that people choose to visit Liverpool for the sole purpose of staying at our hostel," he explained.
"We believe that once Hoax is operating it will most likely force other hostels to raise their standards. This will increase the overall market share," he concluded.