A city councilman is looking to make it easier to open European-style hostels in the city. NY1's Rocco Vertuccio filed the following report.

Adam Mahoney and his friend are visiting the city from Canada. Since they can't afford a hotel room, they decided to stay at a hostel in Chelsea.

"I think it's a great way to travel for cheap. I mean, struggling students, you know," Mahoney said.

Hostels provide inexpensive, dormitory-style lodging usually popular with younger travelers and students in Europe. A bed in a hostel can cost less than $50 a night, compared to hundreds for a hotel room. 

There are only a few hostels left in the city after a state law in 2010 designed to crack down on illegal hotels inadvertently crippled the industry.

City Councilman Mark Weprin of Queens says the city's booming tourist industry needs hostels.

"New York City, I mean, is one of the few places that really does not encourage youth hostels to be here when we should be. We're the number one tourist destination in the world," he said.

Weprin has introduced a bill that would allow hostels to operate with a city license and under strict regulations . The hostels would be allowed to provide up to eight beds in a room and could only open in commercial areas. 

Weprin says the new hostels could attract an extra 200,000 tourists a year. 

Online hostel booking services say the city is missing out on $280 million a year in lost revenue. 

"Particularly young travelers. They come, they want some place affordable to stay because they want to then spend their money on experience in the city," said Feargal Mooney of Web Reservations International Group.

Hostel supporters say they would not hurt the hotel industry because they cater to a different demographic.

However, a spokesperson for the Hotel Trades Council says, "With an unprecedented hospitality glut - and NYC hotels performing worse than all other large metropolitan markets in the country - loosening regulations on low cost youth hostels in our City's neighborhoods is bizarre."

Weprin says his bill has a lot of support on the Council. He expects a vote in this session.