Hostel vs B&B/ Suites-for-rent

Thanks for your reply, i'll try to answer the above questions to address this issue of comparison, as follows:-

(1) Competition is stiff amongst hostels; some data suggests around 200 or more hostels exist in Budapest; others suggest around 120-125 hostels in Budapest whereas the number of B&Bs and GuestHouses seems to be far less in comparison. So competition is less amongst B&Bs/Guesthouses than amongst hostels, hence market share availability is greater for B&Bs/guesthouses than for Hostels.

(2) But... in terms of revenue generation, a ~75% filled up standard-sized hostel may earn close to a 100% filled up standard-sized B&B/GuestHouse. Here's some rough calculation to prove that:-

Standard/basic size B&B/GuestHouse: 4 bedrooms or 4 suites
Standard/basic size Hostel: 20 beds [(6 bed dorm x 1) + (4 bed dorm x 2)] + (1 twin private) + (1 double bed private) = 20 beds].

Standard Rates B&B/GuestHouse: 1 bedroom or suite @ 40 eur/night.
Standard Rates Hostel: 6-bed dorm @ 10 eur/bed/night. 4-bed dorm @ 11 eur/bed/night. Twin private @ 12 eur/bed/night. Double private @ 13 eur/bed/night.

Revenue for 100% Occupancy B&B/GuestHouse: 160 eur/night
Revenue for 100% Occupancy Hostel: 222 eur/night

Revenue for ~75% Occupancy B&B/GuestHouse: [3 rooms or suites] : 120 eur/night
Revenue for ~75% Occupancy Hostel: [4 beds in 6-bed dorm + 5 beds in 2 x 4-bed dorm + 1 twin private]: 143 eur/night

Revenue for ~50% Occupancy B&B/GuestHouse: [2 rooms or suites @ 40eur]: 80 eur/night
Revenue for ~50% Occupancy Hostel: [3 beds in 6-bed dorm + 4 beds in 2 x 4-bed dorms + 1 double private]: 100 eur/night

So we can see that when levels of occupancy are equivalent, a standard hostel may generate more revenue than a standard B&B/Guesthouse. Also, ~75% occupied standard hostel may earn close to a 100% occupied standard B&B/GuestHouse

(3) As for the pricing, unlike the vast difference in rates amongst B&Bs/Guesthouses, most hostels charge around the same rates or within a close-range of rates. So I would like to keep the rates within that range or slightly more competitive if possible. My edge would be the theme, decor, facilities, and standard of service to draw in decent market share.

(4) Whether I know anyone in accomodation industry in Budapest? yes I do know a couple of people who are or were involved in this type of business. Also, I think I would like to have an investor-partner in my project who has experience in hostel industry

(5) I'll check out the competition when the location/site/building of the prospective hostel has been short-listed or selected.

(6) Yes I am going to bring something unique to the project, hopefully, in terms of the theme/decor/ambience of the hostel based on my culture and origin; so, no, nothing based on my experience, but based on my cultural background and origin which would allow me to give the place a unique ambience and set-up. This combined with cleanliness, above par service & facilities might give this project an edge, hopefully! The rest is up to fate i suppose :) .... Not to forget marketing as well! :)

(7) Am I in it for the money? Not just. You can say I am in it for the experience of the city of Budapest which I really like plus the fact that i would like to have my own business (hostel) in such a place/surroudings/ppl/environment. Given the economic situation nowadays, a hostel seems like the comparatively less risky, less capital-intensive, higher-returns business compared to many others requiring similiar levels of investment. Not to mention the joy of providing A-class facilities, service and unique ambience which I hope this hostel would be able to give to its lively young guests.

Thus, so far, it seems a hostel might be a better bet as a business for me (or for anyone having similiar mindset & reasoning or logic) as compared to a B&B/GuestHouse in Budapest. Though I still have to make a comparison of the running costs and expenses between the two (Hostel and B&B/guesthouse) in order to be dead sure about my choice.

[PS: For those of you who have gone through the entire write-up above, pls accept my gratitude for your patience and time spent on the lengthy (phew!) note :) .. I do hope though that im not way off the mark in my thoughts & analysis above! :) ]

excuse moi! but, im an infant, learning my ropes in the hostel world. :)

So isnt: 6bed dorm = 6 beds, 4bed dorm x 2 = 8 beds, one twin private = 4 beds, one double bed private = 2 beds?
Thus: 6 + 8 + 4 + 2 is not equal to 20? :(( :)

[I used to get 99 out of 100 in mathematics in class,but now im wondering if it was only becoz the teacher had a crush on me!? haha ;)]

oops, my mistake... sorry... I thought the twin private meant two double-beds. So is it possible to have two double-beds in a room; or is it something unheard of or illogical? I mean wud it be better/normal/logical to have it as a normal 4-bed dorm instead of a two double-bed room?

I have compared a basic hostel configuration to a basic B&B/Guesthouse set-up. Most basic hostels have around 20 beds i would say. and B&B/Guesthouses on a basic level seem to have around 4 rooms or suites. Otherwise you can't compare these two, simply because a hostel charges by the bed and the B&B/Guesthouse charges by the room. If you have converted a 6 bedroom B&B to a 6 Bedroom hostel, then u automatically have greater number of beds and thus guests, hence higher revenues in comparison.

But u might be very right about the running costs issue and I am getting the feeling that it is this issue which will be the decisive factor signifying whether the hostel or the B&B/Guesthouse is a more financially rewarding option.

Btw, in your experience (John), how far are the costs different in both the cases? Thus, which of the two options seems to be providing a healthier income despite the fact that ostensibly the hostel might be generating more revenue than the B&B/guesthouse?

You see, personally, for my line of thought and logic, I would be fine with a B&B/guesthouse as well; infact maybe more comfortable with it than with a hostel; however, the simple fact that the number of guests/beds possible in a hostel is more than a B&B/guesthouse of equivalent size, suggests a higher revenue and also, most probably, a higher income (from a hostel than a B&B/Guesthouse). Pls correct me if i am wrong here. thanks/