The purpose of the article is to develop measures to improve the performance of Ukrainian hostels in the hotel services market of Ukraine. The subject of study. Economic relations, processes of cooperation of economic entities in the hotel services market, as well as measures to improve the activity of Ukrainian hostels. Methodology of research. The research process uses general scientific (deduction, induction, analysis, synthesis), and special research methods (organizational and functional analysis, comparative analysis) and a systematic approach to the study of the specifics of development and management of hostels in the context of competition for the consumer. Findings. The tendencies of development of the market of hostels abroad are revealed and the main problems of development of the Ukrainian hostels are identified. The formed main tasks of improving the activity of Ukrainian hostels, which contribute to the replenishment of the budget of the country and the region, are formed in the work. The principles of a competitive hostel market in Ukraine have been developed and the strengths and weaknesses of their work have been identified. It is proved that further development of the hostel market is impossible without the use of modern technologies for attracting clients, which should include: availability of flexible tariffs depending on the season; expanding the range of additional services; forming long-term relationships between the hostel and its guests; creation of consumer loyalty programs. Practical value. results in the development of theoretical and methodological mechanisms and practical recommendations aimed at improving the work of Ukrainian hostels in the hotel services market of Ukraine. The main problems of the development of the hostel market in Ukraine have been identified: the lack of full control and regulation of the activity of the hostels by the state and municipal bodies; lack of real work of associations for the development of hostel traffic; the absence of quality standards for hostels. Measures to improve the efficiency of hostels and private sector accommodation facilities at national and regional levels have been proposed. In order to achieve positive changes in the hostel market, joint actions of public authorities are needed, which will allow to undertake measures to improve the work of Ukrainian hostels and bring them to a new level of development, secure their work and protect them from the influence of negative factors caused by the weaknesses of their activities. Keywords: hostel, hospitality industry, hotel, hotel services, hostel traffic, small accommodation facilities. REFERENCES 1. Bailyk, S. I. & Pysarevskyi, I. M. (2015). 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