Initially intended for students and young travelers, hostels are becoming an increasingly popular accommodation choice for successful people with a certain philosophy of life.
Two-bunk beds are an integral part of hostels, while the rooms here make it look a lot like a student dorm.
Entrepreneurs from big cities have a deep interest in hostels for a number of reasons, including:
Big cities don’t have a lot of hostels;
Hostels are popular with young travelers;
Hostels are a source of steady income;
There are a lot of travelers and people who need a place to stay for the night (those visiting the city);
Running a hostel is considered a small business and it doesn’t take a lot of paperwork.
A major problem of starting a hostel business is finding a building that meets your needs. You should consider all options possible while focusing on opening a small hostel for tourists to create a steady stream of income.
This business plan is about setting up a hostel in your city.
hostel business plan pdf
Hostel in europe
Choosing Where to Open Your Hostel
Your hostel’s central location would be a huge advantage. The more guests you want to have, the more space you need. A hostel should be able to accommodate at least 10 persons at a time.
To open a hostel, you may:
1) Rent an apartment – a 3-bedroom apartment would be enough to accommodate 10 persons at a time; your yearly rent will be about 250$ per square meter;
2) Rent one or several floors in a building. That way, your yearly rent could be lower – about 150$ per square meter;
3) Build your own building. This will cost you about 50000-100000$.
Turning an Apartment into a Hostel
Normally, there are no single rooms in hostels, so the first thing you need to do is to make necessary adjustments to the floorplan. The next step is to renovate the apartment. Remember that hostels are popular with young travelers, so add some bright colors and don’t be afraid to experiment with design solutions.
how to start a hostel business
Reception at the hostel
How Much Does It Cost to Furnish a Hostel?
All prices are approximate. Fluctuations within a range of 20% are possible. Average prices are given in brackets.
Bedroom: beds (150$ for a two-bunk bed);
Kitchen: kitchen unit (250-300$), fridge (150-250$), microwave oven (50-100$), washing machine (100-200$), coffee maker (50-150$).
Common area: laptop (300$), Wi-Fi adapter (10-15$), Internet (50-100$).
Bathroom: shower cabin (150-200$), sinks (250-300$ each), toilet bowl (50-80$) + turnkey bathroom renovation (800$).
1) Administrator – in charge of accommodating and assisting guests. The administrator makes sure all guests have everything they need throughout their stay. The administrator also has to take phone calls and ensure all rooms have proper sanitation.
You might want to hire two administrators because of the large amount of work to be done by the administrator. That way, the administrators will work in shifts.
Speaking any foreign language is an advantage. The average monthly salary for a hostel administrator is 1500-2000$.
2) Housekeeper – in charge of cleaning up the hostel, including the walls, stairs, floors, kitchen unit, and rooms. The housekeeper’s duties also include disinfecting the bathroom and toilet bowl, taking out the garbage, buying household chemicals, garbage bags and whatever is needed to keep the hostel clean and tidy.
It’s a part-time job. Normally, housekeepers make 250 to 500$ a month.
3) Accountant. You don’t have to employ an accountant full time. A few days a month should be enough. The accountant salary starts at 500$.
Hostel Hotel business plan
Attracting Guests to Your Hostel
The target audience of your advertising campaign should include foreigners, young travelers and students.
Below are some good advertising channels:
1) International websites enabling users to book rooms worldwide
You can advertise your hostel using paid or free services.
2) Contextual advertising
It’ll cost you 250$ to 1000$ depending on the competition and the number of keywords in an ad group. To take full advantage of contextual advertising, let a professional take care of it or you may just waste your money.
3) Online booking services
There are special services designed to help users choose a hostel. You can advertise your hostel here for just 25$ to 50$ a month. The photo and description of your hostel are shown on a web banner, an advertising medium. Your banner ad can pop up on any page of the website or on the page representing a specific region.
4) Business cards
You can distribute your business cards in places where your potential customers may hang out. These are coffee shops, airports, colleges, railway stations, etc. The cost of your business cards depends on their material and design. Thus, business card prices vary from 5$ to 25$ per 100 business cards for digital printing and 25$ rubles for offset printing.
5) Weekly newspapers
Your ad containing a picture and text will cost you 100$ to 150$. A 10-word ad costs 30$.
How Do Hostels Make Money?
First and foremost, hostels charge their guests for rooms. Normally, Internet access is offered as a free bonus. You may also charge extra for using kitchen appliances and for breakfast.
Running your hostel will cost you at least 10 thousand rubles per month, excluding staff wages. Your monthly income may vary from 1500$ to 3000$ per month depending on the size of your hostel. Thus, a 10-person hostel will pay for itself within 6 to 15 months.