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An Arab, an Irishman, a Texan and a Mexican walk into a room.

No, it’s not the beginning of a bad joke, just a typical Tuesday at the J. Ira & Nicki Harris Family Hostel in the South Loop, which hopes to see some 60,000 guests from 65 countries walk into its rooms this year.

“It’s like the United Nations in there,” says Sammy Mugambi, 28, of Kenya, referring to the sleeping quarters he shared with nine strangers the night before. Sipping a cup of vanilla-flavored coffee and wiping away the crumbs of a toast-and-marmalade breakfast, he ticks off the nationalities of his roommates: “A Lebanese, an Indian, a Singaporean, an Irishman, an English guy and an American. Lots of Americans,” he clarifies. “I plan to just hold hands and sing, ‘We Are the World.’ “

Nothing would sound sweeter to the Harris’ owners and staff, who say hostels are as much a social movement as a means of cheap travel. Communal living among international travelers, they firmly believe, deepens cross-cultural understanding and promotes world peace. Opened 15 months ago at 24 E. Congress Pkwy., the seven-story Harris facility is a showcase for an ambitious new era in hosteling, one that not only fosters the warm-and-fuzzy “We Are the World” spirit but offers community-outreach education programs-all in a secure setting of cleanliness and creature comforts undreamed of by earlier generations of backpack adventurers.

“How Chicago progresses will dictate how the hosteling movement moves forward more broadly,” says Russell Hedge, executive director and CEO of Hostelling International-American Youth Hostels, the non-profit organization that manages the Harris and 125 other hostels nationwide. American Youth Hostels operates with other national association under the worldwide Hostelling International umbrella, a total network of nearly 4,500 hostels in more than 70 countries.

“Chicago has the second largest hostel in the United States,” Hedge says, “the fifth largest in the world, and the first with roots deep in the notion of community programs.” Like the rest of the travel industry, American Youth Hostels saw its business drop by a third after Sept. 11, but Hedge remains optimistic. “I’ve seen the hosteling experience,” he says. “I’ve seen the impact of it on other people. I’ve seen the impact on me. The future is bright.”

The present, however, remains shadowy, hostel executives say. Except for students and others traveling abroad on a tight budget, few Americans are familiar with hosteling, and fewer still know that facilities in the United States even exist, much less the state-of-the-art Harris.

“We’re the best-kept secret,” says Joseph F. Bond Jr., director of marketing. “That’s what we’ve got to change.”

James Van Atta, general manager at the Harris, estimates that 98 percent of Americans do not know what a hostel is. “The remaining 2 percent are those who backpacked through Europe during their college years,” and few of them know about hostels in the U.S. or how much they’ve changed since their “Europe on $5 a Day” heyday in the late 1960s and early ’70s.

In that era, hostels offered little more than a cheap sleep in a spartan setting. Proprietors locked their doors during the day, imposed a curfew at night and expected guests to perform daily chores to keep the hostel clean. These days, Arthur Frommer’s classic guidebook can’t send budget-minded travelers through Europe for less than $70 a day, and hostels have moved upscale as well.

The Harris Family Hostel is the vanguard of the trend. Occupying seven stories in a brightly renovated vintage building between the Auditorium Theatre and the Harold Washington Library, the hostel is open 24 hours a day-no curfew, no lockout, no chores. Reservations can be canceled or changed until midnight the night before, checkout is 11 a.m. and check-in is anytime a bed’s available. A cleaning crew scrubs, dusts, mops, polishes and vacuums in continuous rotation. Uniformed guards watch an array of security monitors scanning every public area in the building. Van Atta, who has managed hotels for Marriott and Holiday Inn, oversees a staff of 36 that grows to 50 in the summer.

An Italian cafe and a Mexican restaurant serve biscotti and burritos, espresso and beer. The Elizabeth Morse Library offers novels, magazines and four shelves of travel books. An adjoining room houses eight e-mail and Internet terminals, and a television lounge and conference rooms are nearby. Ground-to-ceiling windows in the airy dining room overlook the Wabash Avenue “L” tracks.

Two key features of traditional hosteling are preserved: An overnight stay is still relatively cheap ($26.50 a night for Hostelling International members, $29.50 for non-members); guests must share sleeping quarters with their fellow travelers (rooms have as few as four and as many as 10 bunkbeds); and hostelers still have to make their own beds.

Retired history teacher Peter Nunan, 63, a recent guest, has been hosteling since 1964. He rates the new generation of hostels like the Harris as a big improvement over their no-frills predecessors. “In the old days,” he recalls, “you had to work in the hostel after you finished your breakfast.” At a Heidelberg hostel, “they blew a bugle and pulled a master switch to turn out the lights. Very early the next morning, German oompah music played. You didn’t sleep [late] at that hostel.” Though such rigors may have built character, Nunan says, “I don’t miss it.”

Even with fewer rules and cushier amenities, bunking with six snoring roommates isn’t for everyone. (“Those of us who use hostels a lot know to carry earplugs,” confides Brian Everingham, 49, a history teacher from Sydney.) But devoted hostelers say they wouldn’t trade a hostel dorm for a hotel room at the same price.

“The main thing is the companionship; you can talk to people,” says Ruth Metz, who at 82 has traveled through more than 52 countries over 20 years. “In a hotel, you’ve got four walls and a TV in a language you don’t understand.” A picture of grandmotherly comfort in a red sweater dress, Metz says she spent her 75th birthday in a hostel in Istanbul, and she returned recently from a solo jaunt to Costa Rica. “I’d imagine there’s at least 100 different hostels I’ve stayed in, most of these all by myself.”

Seniors like Metz and Nunan are a small minority-15 percent-within the 3.4-million-member American Youth Hostels. The vast majority of hostelers are between 18 and 34, and for this demographic, it can be a fine line between companionship and carousing.

“There are party hostels,” acknowledges Mike Reed, director of operations and services, but his AYH facilities are not among them. Alcohol and smoking are banned on the premises (excluding the cafe and restaurant at the Harris). “People come to us for cleanliness and security,” he says. “They seem to feel a lot safer in our hostels.”

Michael White, 27, a courier from New Zealand, came to Chicago from New Orleans, where the independent hostel he stayed in was “very much more of a party scene” than the Harris. “I went out to jazz night one night, and I finally got home, but I don’t know how.”

Outfitted in leather hiking boots, blue jeans and a jacket that covers a “Co-ed Naked” T-shirt, White says the Harris Family Hostel is “nice, everything’s clean,” though the restrictions on cigarettes and alcohol make it harder for people “to just sit down and socialize.” But even at the more strait-laced hostels, close quarters can lead to intimacy. “There’s [a] general lack of actual privacy,” he explains, “but certainly if you’re prepared to disappear into showers and all that, it’s definitely going on. It just depends on the mix.”

Most of those interviewed recently at the Harris seemed content to limit their social interaction to joint outings and interesting conversation with other guests. “I get a feel for people’s energy,” says Sairus Patel, a 33-year-old computer engineer from Palo Alto, Calif. “Five of us stayed up really late last night-two Americans, two Europeans, one Japanese-talking in the room,” Patel says. “I get exposed to a whole new culture and point of view.”

“I picked up a girlfriend in a hostel in Scotland a year ago,” says Mike Earl, 37, a salesman for British Gas in Warwick, England. Mainly, he says, hostels are good places to “hang out, get your laundry done, meet people and exchange information.”

Some go so far as to say hosteling changed their lives. “When I was younger, I was a bit of a wallflower,” says Raina Gustafson, 22, of Phoenix, who began staying in European hostels three years ago. “Traveling definitely helped me get over that. I would not be the person I am today if I hadn’t stayed in hostels. With some people I’ve met, I’ve had really good conversations. With other people, I’ve gotten really drunk.”

Gustafson and the other guests give the Harris Family Hostel high marks, not only for its amenities and security, but also for its proximity to the city’s many attractions. Staff members at an information desk dispense tips and directions. Behind them, bulletin boards offer maps of the city, a rundown of “hostel happenings” and Chicago cultural events, and the occasional flier. “Jerry Wants You in the Audience!” blares a poster advertising Jerry Springer’s show.

Gustafson planned to see the Van Gogh and Gauguin exhibit at the Art Institute, a popular destination. Sairus Patel joined group meditations at the Midwest Psychic Institute, and Michael White hit the clubs, proclaiming Chicago “the home of house music.” Mike Earl enjoyed watching the Bears make the playoffs in Soldier Field one night and meeting Buddy Guy at his blues club on another outing. “There’s lots more I’d like to see,” Earl says. “I’ll definitely come back.”

That potential to boost the city’s annual $3.36 billion in tourism revenue is what civic leaders were counting on when they decided to back a downtown hostel. The city and state contributed $13 million to the project in the form of tax-increment financing and tax-exempt bonds, while a private fundraising drive attracted $2 million from the Harris Family Foundation and others. American Youth Hostels along with the Metropolitan Chicago Council, which organizes special programs and provides financial and administrative support for AYH, covered the rest of the $16 million cost of converting the former manufacturing site into the 88,000-square-foot Harris hostel.

“The value of [hostelers] is a long-term impact,” says Dorothy Coyle at the Chicago Office of Tourism. “They experience Chicago at a time in their lives when it can make an impression on them. It can become something that they want to come back to many times in their lives.”

Hostelers say that, while they may be small-budget travelers, their spending can have an impact on local tourist attractions. “The money I save on staying at a hostel instead of a hotel is money I can still spend in Chicago on museums and shows,” says Gustafson. Peter Nunan’s wife, Karen, an American who settled in Australia 25 years ago, notes that the average tourist who comes to Australia stays a short time, but “the backpackers actually spend more money because they stay much longer.”

In a typical year, dues contribute about 10 percent of American Youth Hostels’ revenue, contributions another 10 percent, and hostel overnights about 75 percent. The Harris Family Hostel and other major facilities in urban areas account for 60 percent of overnight revenue, and 70 percent of their guests are international travelers. With many of those international visitors now staying at home and its American members less likely to go abroad, AYH is depending on domestic travel to recoup revenue.

“Our marketing strategy prior to Sept. 11 was bringing international travelers here and promoting our membership, knowing they were going to go overseas,” says Bond, the marketing director. “What we’re going to emphasize now is, if you’re going to travel domestically, use our hostels.”

Occupancy rates at the Harris ran upwards of 90 percent before Sept. 11, and from 1990 to 2000, overnight stays in the American Youth Hostels national network increased from 770,000 to 1.2 million a year. Reed says comment cards show guest approval level is 90 percent and rising. To maintain those numbers, travel inspectors visit every AYH hostel once a year, ensuring that each meets the standards set by Reed’s office.

David Kalter, organizational development manager, believes the Harris Family Hostel will put Middle America on the map for hostelers worldwide. “We have a huge strip in the country where there’s very little presence of hostels. Chicago is the cornerstone of a movement to build more hostels in the region.”

But American Youth Hostels, its leaders repeatedly emphasize, is not in the hospitality industry for the money. Last fiscal year, the national network of over 125 hostels spent $13 million and took in revenue of $12 million (contributions covered the deficit), but officials say they would charge nothing if they could. “The purpose of hosteling is to promote world understanding by getting people of all cultures together talking and doing activities,” says Van Atta. “We’re basically a peace organization.”

CEO Hedge even thinks a certain committee in Oslo should be paying attention to his organization. “Given the work of HI-AYH and the span of hosteling-we’re in 60 different countries and we serve more than 32 million people every year-I believe our work should be worthy of the Nobel Peace Prize,” he says.

To broaden its social commitment, the network plans to run community-education programs at its hostels, and has launched its initial effort at the Harris Family facility. Education Director Ginger Roberts oversees about a dozen such programs, including seven for young people. The most significant, she says, is one called Cultural Kitchen. “We try to utilize the idea of food and meal preparation as a segue into the larger study of customs and geography.” The six-week program, funded by the Polk Brothers Foundation, includes an overnight stay at the hostel, culminating in a joint meal prepared by the students and international visitors.

Another outreach campaign involves the student center. Decorated with low tables, cushioned chairs, a ping-pong table and 36 international flags, the space now serves mainly as an informal meeting place for guests and visitors. But the Metropolitan Chicago Council wants it to serve as “a drop-in location, as an activities center, almost like a student union, for all of the students in the Chicago area,” says Thomas Applegate, an attorney and MCC board member. “That’s something new in Chicago.”

But for now, most of those in the student center are hostel guests, and even local college students visiting the cafe and restaurants downstairs say they’ve never heard of it. Hedge, as ever, is optimistic: “The student center will build a stronger link between the student community and the hostel visitors. There’s a natural link there. Thousands and thousands of U.S. university students hostel [overseas] every year. What the student center provides is the opportunity to continue that link when they return to the United States.”

Upstairs, the third and fourth floor contain four 10-bed rooms, two four-bed rooms, and 32 six-bed rooms (Columbia College students occupy floors five through seven). All rooms have their own heating and cooling control, and the smaller rooms feature en suite bathrooms. The four-bed rooms are co-ed; the others are not. Inside, beds are arranged in neat wooden bunks with light blue blankets, and each comes with a light and a locker. Seven washers and eight dryers are on hand for those traveling light.

“This building is run more like a hotel than a lot of hostels,” says manager Van Atta. “All my staff are former hotel people [who] came from the hospitality industry with the training to serve people.”

It’s Sarah Milsome’s second day in the Harris Family Hostel, and she settles into a cafeteria window table overlooking the “L” tracks with a late lunch of spaghetti. Milsome, an easygoing 24, wears her straight black hair down and punctuates her speech with “No worries.”

She’s been away from her Melbourne home for a little less than four years, including eight months of travel in Europe, a year of work in Alberta, two years of work in London, seven weeks of travel in South America, and three weeks and counting in the United States. She began this trip in Miami Beach, migrated to New Orleans, and arrived in Chicago by bus yesterday from Memphis and Nashville.

“Most of my traveling is by myself,” Milsome says, “but you don’t spend a lot of time by yourself. You meet people. They’re there for the same reason you are. You go out together. It’s really quite cool. Most of them you never see again, but lots of them you still keep in contact with,” about 60 people at last count in her case. “E-mail,” Milsome says, “is a wonderful thing.”

She took three friends home with her for Christmas. “One I met in Canada, another is from London, and one is a mate of mine I just met in New Orleans.” Yesterday, Milsome says, she and another friend from the New Orleans hostel “went up to Lincoln Park, wandering and wandering for hours.” Now, she says, “I’d like to see the Art Institute and the Adler Planetarium,” but her friend’s gone and she’s afraid she’ll have to go it alone.

“It’s very nice here. It’s very central, very clean. The only problem is meeting people because it’s big. I’ll be lonely here,” she worries.

Half an hour later, she’s in the student center chatting with Dan Peters, a 19-year-old from Devon, England, on his first day in Chicago and his second week of a yearlong tour around the world. They rise together to hit the streets.

For Russell Hedge and his global peace mission, that’s another two down, 6 billion to go.