YHA trustees have agreed to implement a radical programme that will close 32 hostels, axe 70 jobs and plough £18m into a new youth hostel network.
The overhaul forms part of YHA's new 10-year business plan and follows a 12-month review. The closures, to be made over the next three years, will help to repay the association's £34m debts by cutting its long-term borrowings and interest payments.
Membership, which hit a peak in the early 1990s at 320,000, has fallen to 250,000 this year.
The charity will now concentrate on developing new hostels for young people rather than persevering with loss-making rural establishments, which will be sold on the open market. Its new strategy will target families, schools, youth groups and first-time backpackers.
Chris Boulton, chairman of the YHA, said: "This scheme of investment forms the cornerstone of a new 10-year strategy for YHA, which sees us refocus our efforts on young people.
"We want to provide low-cost accommodation so young people can discover England and Wales, and we can only do this by providing hostels in great locations."
Roger Clarke, chief executive of the YHA, added: "Changing tastes and markets have left us with too many under-used properties in less popular locations. We expect to use sale proceeds from some of these properties to raise funds for YHA's future development plans."
The organisation will offer a "programme of support" to those who lose their jobs and will work with two unions - the National Association of Youth Hostel Staff and Amicus.
Sarah White, director of human resources at the association, said: "YHA operates a robust redundancy programme. We will discuss relocation options among affected staff and assess and address training needs."
A spokeswoman for the Ramblers' Association said it would be "saddened" if the decision to close hostels affected its members who use YHA hostels, but added that the association understood the difficulties the YHA faced.
Trustees of the YHA have decided to implement a radical programme of hostel closures and job losses
The move is part of the association's 10-year business plan and will help to repay its debts by cutting long-term borrowings and interest payments
The YHA plans to concentrate on developing new hostels for young people.