The Youth Hostel movement had become world-wide by the 1960s. It had at this time a near monopoly of organised international Budget Youth Tourism, on the basis of providing simple accommodation without frills for travelling youth. At some time in the 70s, there occurred a "sea-change" in the needs and attitudes of the young with regard to how, where and why they spent their recreational time away from home. Youth Hostels did not at first notice a gap was widening between their commendable social purposes with their old-fashioned image and the wishes of the young market they existed to serve. Market Research began to reveal this gap and the reasons for it. Between 1976 and 1989 a framework of the trends of change in Youth Tourism was built up with an indication of the strong and weak points of Youth Hostels. This paper illustrates the trends and their implications for Youth Hostels and describes some of the action taken.