Hostel Workers, paid/unpaid?

This is a really good topic.

Most of the hostels in big cities that do make a lot of money also pay their staff normal wages. They hire people with the legal right to work in the country, and who therefore can look for other work if they don’t consider the terms to be fair. Backpackers without the legal right to work won’t even be considered in many cases, so these hostels are not options for many working travelers.

Some hostel businesses are labors of love for the owners, so they’re willing to work for a relatively small profit. Consequently they may need to find people to help them who must also be willing to work for very little money. In these cases the staff is frequently well cared for despite the low wages because of the community that is formed and the non-financial benefits of working there. I don’t have any problem with these, and they’re usually the hostels that I like the best.

A very different type of hostel is one in which the owner only loves the bottom dollar, and he tries to take advantage of travelers who are willing to work for painfully low wages in order to maximize his personal income. These hostels could actually have high or low profit, but they frequently tend to be lower profit businesses – hence the increased need to skimp on wages. I think these are the ones that you are really talking about, right?

Something that’s important to mention is that a lot of hostels may not make nearly as much money as the guests think they do. They see a bunch of people handing over their Euros every night, and they assume that the place must be a cash cow. Receptionists frequently have the same misconception, and just about everyone in the world, no matter where they work or what they do, feels like they should be earning more money. Part of the training that I always do with my new staff members is to explain where our money really goes to give them a perspective on their wages (which are at the level of the average salary in my area). They see a fair amount pass through their hands on their shift, but they don’t see that same money flying right back out the door for the mortgage, bills, taxes, repairs, and the always-impending low season when heating costs spike and income takes a dive. It’s good to explain just how far each guest’s money goes towards covering our expenses and how little of it stays with the business. It also helps to convince them to turn off lights and heaters when no one is in the room. :)

There is also an important difference between staff and work exchange. A staff member is a long-term employee who should get paid appropriately for the location. The hostel is their job and their source of income. Someone doing work exchange is by definition working in exchange for their accommodation (and anything additional that the hostel operator wants to give them). They are reducing their travel costs by temporarily performing helpful tasks. The problem comes when these two responsibilities are merged and the work exchange travelers are used as regular staff instead of hiring a dedicated team. I can see why it happens, since the backpackers so frequently make better hostel staff than locals do. That doesn't make it right though.

Here is a link to the previous discussion of hostel worker exploitation mentioned in the original post.

While in my city, +70-80% small hostels are operated by volunteers, we don't hire any of them because we have a lot of requirements for the service quality. The salary of my receptionist is set to be higher than the par of hosteling industry, and there's an extra bonus money for foods, travels, overtime work, but a few months later, I also heard some mild complaints that the salary is low.

Like Brian suggests, staff may come up with an idea that the BOSS earns too much without realizing the huge cost behind running our hostel. The risk of my business is pretty big because of hefty rental payment. One of our competitors (their investment was small, only Euro 120,000) ran out of business within 5 months because they couldn't afford to pay the rent anymore. It's quite lucky that we can still survive.

my solution....probably:

I'm seriously thinking of making my staff act more like an entrepreneurs and change their worker's mentality. They may introduce their own products and sell it in the hostel. The hostel will become their little platform to show off their creativity, make them feel more belonged to the hostel (well, when they quit they'll have more to lose) and give them the impression that the owner is willing to share our business together with them.

Do you think this idea is possible?

That’s a really good idea Zomac, for all of the reasons you mentioned:

• Gives the staff the chance to earn extra money
• Gets the staff more involved
• Gives the staff personal incentive for keeping their job
• Shrinks the gap between the owner and the team

Plus, it could provide extra services and products for your guests that you don’t have to be responsible for.

On the other hand, their entrepreneurial skills and service level will be reflected in your ratings. Consistency may also be an issue. If Staff Member A offers a service, will Staff Members B or C provide the same service on A’s day off, or will the guests just go without for that day?

A quick brainstorm to help them get started:

• Cooked meals
• Prepared snacks and desserts
• Tours and excursions
• Massages
• Language/yoga/music/art/dance/whatever classes or workshops

Let's keep this list growing!

There were some good ideas in an older post: Any ideas for making extra money in you hostel?

Zomac, if you present this option to your team, please let us know how they respond to it. I'm curious to know if they will see it as an opportunity or as an extra responsibility.