How to Open a Hostel — Ultimate guide

CHOOSE THE PUBLIC FOR YOUR HOSTEL

You can start working on your niche idea by depicting what exactly do you need to start a hostel of your dreams. It can be from general and global concepts such as that you want to look appealing to families that travel with kids or lonely travellers. The same applies to the budget you want to start with, that’s why you will have to decide how much you can make in a hostel a year before you define the niche.

To get a clear idea of what your business can look like and what are the requirement to open a hostel and operate it, so it will bring you profit. There are many websites where travellers leave comments about what went wrong and things they liked in the hostels they had visited, which can give you the right idea how much does it cost to open a hostel.

FIND A LOCATION FOR YOUR HOSTEL

That is why one of the main factors of success for your business is the right location. For which you can previously make a survey among the tourist that are visiting the area. You can also talk with the neighbouring hotel o hostel workers, because they might provide you with information about how much money do you need to start a hostel in the area.

In general, to calculate how much do you need to open a hostel you need to make an accurate evaluation of the location cost, and possible additional potential costs that are not evident at the moment such as maintenance of the building. Because hostels tend to be located in old city or town centres where buildings need constant fixing and amending.

Another possibility to open your own hostel is to look for an enticing place somewhere in the countryside, where you can attract a different type of public that can bring your business more money and considerably diminish the average cost of opening a hostel.

It is also advisable that wherever you go, you look for a location with an easy access and, preferably, several means of transportation. Because the majority of your potential clientele will arrive to your hostel using public transport. Only location by itself and how accessible is the place can surely affect how much a hostel can make a month.

All in all, location is the most important decision that you have to make before opening a hostel, because it will greatly influence not only on how much you need a month to run a hostel, but also on how much you can earn from running a hostel in that particular area.

RESEARCH THE MARKET

If the area you choose for your hostel is too busy with other similar facilities, including bed and breakfast or three stars hotels, you might need to consider opening your own hostel somewhere else, because it can negatively affect on how much a hostel can make a year.

If you still decide to open your hostel in a high-density hotel area, you will have to think carefully what do you need to open a hostel and make it different from the competitors in the area. Scope all the possibilities, define your concept to the minimal detail, don’t be afraid of being different, and you will be able to make an outstanding hostel that will attract many visitors.

PERMITS AND LICENSING FOR A HOSTEL

You have to keep in mind that some cities there specifically designated areas for hostels, usually they are areas close to the village or city centre or touristic area. To find out what exactly do you need to open a hostel and where you can locate it, contact the local zoning agency, which will advise you the best areas.

It can take you a while to realize what is the real initial cost of opening a hostel in a particular area, so do not get scared if you did not account for some hidden costs or taxes from the beginning. It might be a good idea to have a consultation with the local restaurant and hotel business association where they can advise you on the necessary procedures and may be to help you to decide which option is more suitable for your business.

Anyway, it is highly recommendable that you consult a lawyer or contact a consultancy that is specialized in tourism and hotel business in your town or city, because they most probably would know how to start a hostel and avoid or cut on unnecessary costs. They can also provide you with information on how to run a hostel and make it more profitable by cutting down costs or upscaling your business according to current market situation.

DECIDE THE SIZE AND SERVICES

Small hostel usually can fit around 12 beds in 4 or 5 rooms building, medium size starts from 6 to 10 rooms where you can place up to 18 or 26 beds, and, finally, large hostels start from 12 bedrooms, whose capacity can range from 24 to 46 sleeping places. You should take this numbers into account when you will calculate how much a hostel can make a year.

You also have to make some space for additional services, like a lounge area, maybe a terrace or inside yard or small garden that can represent an attraction for tourists. Make sure you also include extra services, as breakfast, bike or suitcase storage place, wake-up service, wi-fi working areas, a bar or a small kitchen. All these services can considerably affect how much a hostel can make a day.

KEEP YOUR HOSTEL BUDGET UP TO DATE

Why keeping track of your hostel budget is important? You might think that it is perfectly fine to hire an external agency or an accountant to register you budget flow. But there is one major advantage if you keep your own books. Not only you will know what exactly is the cost of running your hostel, but you will understand what are your main sources of expenditures and react in time to reduce or eliminate them.

There is accountancy software that is very user-friendly and even a person without any knowledge in accountancy can manage. This type of software can help you save money.

500+ Financial Model Templates— finmodelslab.com