Report

How long does it take to have enough guests?

Start a Hostel

Sam De Raes started this discussion 5 years 6 months ago

How long does it take (when marketing etc is done right) to have enough guests to get out of costs (or break-even)?
If I want to make a 3 year plan, I'm guessing the first months I'm not making that much money (if any) on guests.

Comments

Report

jamesmurdoch

5 years

In Australia you can get guests immediately. I currently have just 1 hostel (120 beds) but use to have 300 beds and it was much they same. The majority of my bookings come in the last 3 days. Other countries and cities will have completley different stats. 30-50% of my guests will extend their booking and stay longer.

If you knew exactly which day you planned to open your business this would enable you to have availability on your booking channels potentially months in advance... Booking channels being Booking.com, Agoda, Hostelworld, Hostelbookers, Expedia and Airbnb for example.

It will depend if you open in the high or low season of your area. If possible time it to open for the high season to optimise your cashflow.

You could offer heavily discounted prices to fill your hostel, create a good atmosphere (nobody wants to go in an empty hostel) and then increase the prices, some of the guests will extend and then you will have new check-ins.

Report

samderaes

5 years

Hi James

Thanks for the advice.
I figured in low season I should have 40-50% occupation and in high season I should get it up to at least 80%. Better be modest then over confident, right?

Report

jamesmurdoch

5 years

You should always do your numbers for the worst case scenario to see what you could be in for and then try with some more accurate numbers of what you expect. In Australia now the market has been pretty bad for the 3 years but recently I changes business partners and sold them 25%, aimed to be 1 of the cheapest in the market but try to achieve the best occupancy November until now Today is about 93%. Abour 40% up on last year just focusing more on the online side of the business price wise.

The key to making profit is reducing your overheads such as electricity. I changes every light build in the hostel to Led which I got off Ebay, saved $500 plus per month, installed Solar, ROI is about 2 years. Reducing water which costs me $30,000 per year, they charge for usage and disposal. Change to water saving shower heads. Reduce staff costs by using volunteers or work for accommodation.

Yes it's better to be moddest because if you sign and 5~10~20 year lease the business cycle will change many times and will be a recession or 2.

Report

samderaes

5 years

Thanks a lot James!

Search form

Report 'How long does it take to have enough guests?'?

Report 'In Australia you can get'?

Report 'Hi James'?

Report 'You should always do your'?

Report 'Thanks a lot James! '?

Join the world's largest community of hostel professionals.

Check Your Email