Opening a hostel is something that appeals to many people. The community feeling, the backpacker vibe, and a sure way to make money, right? But just like with any business, things will happen that you won’t expect. To help you on your way to opening a hostel, HostelProfessional has put together this list of 10 things you must know before getting started.
1. Be careful with your rental contract
Your rental contract must say in exact terms what the property can be used for and how long you intend to rent for. Preferably there will also be an option to extend the lease. There should also be a clause about rent increase. It should not be allowed to be raised more than the rate of inflation or an agreed upon percentage.
2. Permits are everything
Without permits you don’t have a business. When opening a hostel, get to know your safety inspectors and the people at your local government office who are in charge of your permits. When the inspectors do come around – when, not if – make sure there is no reason for them to find you in violation of your permits. Losing your permits means losing your hostel. Be mindful that in some countries there can be backroom deals between inspectors and other business owners who can shut you down if they see you as a threat or have any personal grudge. It’s rare, but it does happen.
3. Your neighbors will hate you
Be prepared to deal with your neighbors and take every precaution to avoid problems. If it’s a repeated issue you must do something to ensure the complaints are reduced as much as possible. Complaints from neighbors can’t be ignored because if there are too many complaints and the police get involved you could be shut down.
4. Have an exit strategy
It’s always a good idea to have an exit strategy when opening a hostel, or any business, in case it doesn’t flourish as much as you expected. Know how much you’re willing to lose in a worst case scenario. This will save you from losing too much if things go belly up.
5. Keep accurate records
Record your revenue and expenses so you know how much you’re actually making. This can be very different to how much you think you’re making. There might come a time when you want to sell your hostel and it will be much easier if you have accurate records of your revenue and expenses. It will also help you make plans for expansion if you wish to go down that path.
6. Traveler talk gets old
Be prepared. You will get tired of being asked the same set of questions every day. What made you start a hostel? What made you move to this city? Where are you from? When it gets too much it’s probably time to step back for a while a let your staff mingle with the guests. Maybe come up with some alternative ways to answer the questions so you can keep your sanity.
7. Carbon Monoxide
You really must have carbon monoxide detectors in your rooms. Carbon monoxide is odorless and colorless. It can come from outside and also from heaters in the rooms. It’s rare, but if it kills your guests that’s the end of your business.
8. Things will always need to be replaced
Plan on needing to replace everything. Mattresses, pillows, sheets, light bulbs, shower fixtures, fans, plates, cups, silverware, windows, doors, door knobs, shower curtains. The bigger your hostel, the more often you will need to replace things, whether as a result of breaking, theft, damage, or general wear and tear. It will happen a lot more than you expect.
9. Secure those valuables
People will steal things. Sometimes the thief is another guest, sometimes it will be an outsider. Security cameras are 100% necessary, at least in all common areas. Providing lockers does help a lot, and you can also offer to keep valuables in a safe behind reception or in locked baggage storage.
10. Use a Property Management System
It’s impossible to update Booking.com and HostelWorld etc every time a booking comes in without ever getting over-bookings. A Property Management System will do this for you, and help you keep track of who has paid, who has checked in, and set your rates. Without it you will spend hours of your time sitting at your computer hating life. There are several options available – try HostelProfessional for free today.
If you have any questions or comments about anything in this article or HostelProfessional, we’d love to hear from you. Just leave us a comment below or get in touch via our contact information.
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