Hostel: What is it and what benefits does opening one offer?
Hostels have become a popular option for travelers looking for a more affordable experience than a traditional hotel.
This accommodation model has unique characteristics that make it ideal for certain types of guests, especially those on tight budgets or who want to interact with other travelers. That’s why here we ask ourselves: Is it better to start a hostel instead of a hotel?
What is a hostel?
A hostel is a type of budget accommodation that offers shared rooms and sometimes a limited number of private rooms. Unlike hotels, hostels usually have common areas where guests can socialize such as kitchens, living rooms, and terraces.
Their main goal is to be much more accessible by sharing rooms between guests. It is common for hostels to be frequented by backpackers, students, or young tourists looking for a simple and cheap stay.What is the difference with a hotel?
The main difference between a hostel and a hotel is the level of services and the structure of the rooms. Hotels offer more privacy, with rooms that are not shared and additional services such as room service and a spa.
Hostels, on the other hand, offer shared spaces (rooms and bathrooms). Although they also have a more relaxed and social atmosphere, not as intimate. Likewise, another difference is the rate, since they are considerably cheaper.
Although, if we could summarize all of the above in one point, it would basically be privacy. And that is because, in a hostel, you share spaces with many people, while in a hotel, this does not happen, unless you are accompanied.
What is the business model of a hostel?
The business model of a hotel is similar, but different from that of a hostel. In this case, the hostel is based on offering affordable prices in exchange for more basic services. For example, sacrificing having a private room for a lower rate.
Earnings come from the volume of guests in shared rooms and the rapid turnover of these guests. In addition, some hostels generate additional income by selling tours, social events or services such as bike rentals and food.
However, we can summarize that the entire business model of a hostel is based on the same thing as a hotel: reservations. If there are no reservations, there is basically no income.Advantages of opening a hostel
According to experts, these are some of the advantages of opening or starting a hostel.
Low operating costs
Being a business based on offering basic services, operating costs such as staff and maintenance are lower than in a hotel. In addition, it is not the same to maintain 200 private rooms than 20 shared rooms.
High guest turnover
Hostels attract young travelers and tourists who tend to stay for short periods, which allows for greater turnover and constant cash flow. This way you can have a higher volume of reservations in the same period of time versus a hotel.
Initial investment
As if that were not enough, the initial investment to set up a hostel is much lower than setting up a hotel. You will not require the same amount of real estate, for example, or materials to set up the rooms.5 points to consider when opening a hostel
Creating a hostel business plan can be just as challenging as creating a business plan for a hotel in Bali, for example. That’s why we recommend taking these 5 points into account.
The location of the hostel
One of the most important keys when opening a hostel is its location. For it to be successful, it must be located in a key location, central and close to most local attractions.
Travelers often sacrifice comfort and privacy in exchange for a good location, for example, where they don’t have to move or use vehicles for transportation. That’s why a hostel that’s far away is not usually as successful as one in the city center.
Room comfort
Although the rooms in a hostel are shared, comfort is not left out of it. Travelers look for beds where they can rest and clean bathrooms so they can clean themselves without suffering from insects, pests or cold water.
So, when designing a hostel, comfort must be taken into account, which, although it will be shared, should not be left aside. This will help the hostel stand out from the competition.
Hygiene and health
Just because they are shared spaces and low rates does not mean that guests have to sleep among cockroaches, rats and bad smells. Remember that hygiene is key because here, as in hotels, reviews are essential.
Therefore, it is important to create a cleaning and hygiene plan for your business where you consider maintaining the best quality shelves. This way you will ensure a good experience for your guests.
Living and social spaces
As we already told you, the lack of certain amenities is complemented, for example, by shared living and social spaces. Such is the case of dining rooms or kitchens where travelers prepare their food and live together.
Other spaces that can be added are courts, game spaces with pool or foosball tables, terraces and even a pool. All to provide the best experience for guests.
A good business plan
Finally, and as we recommend at IHCS, it is essential to have a good business plan. Here you must detail everything from the market you are going to serve and your room offering to your rates and marketing strategies.
In our Consultants Hub, you will find the support you want to build the best business plan for your hostel. This way, you will increase the chances of creating a successful business that always has travelers waiting to book for their vacation.
