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Minimum Capacity

Start a Hostel

djshu started this discussion 17 years 11 months ago

Hi there, what do you think is the minimum capacity necessary to start a good hostel, in terms of both guests and rooms?

Thanks

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thlodge

17 years

Hmm .. in my thoughts there are a lot of factors that go into the size of a hostel ....
What is the usual customer base of the area you are looking at, can you expect 5 or 25 guests at a time, are your guests coming by cycle, car (2-4), van (7-9 ), bus load (25-40), are they more likely to be singles (1), couples (2), families (4-6), groups (10 - 25)
What are the available properties in the area, are most of the properties large residences, motels, hotels,
What are you able to afford with your fiancial resources, don't forget the cost of remodelling the building to meet your needs and the local building requirements, look for a property that is workable, has enough space to get started, can be expanded or renovated as your customer base increases

When you kind of put all this together you should have an idea of the size hostel that fits the area and fits your plan of opperation ..

If you want to discuss particular details .. lets hear about your options and plans ... Rich

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thlodge

17 years

In the HI network there are home hostels with as few as 3 beds .. and city hostels with as many as 100+beds ..
Is this going to be a full time occupation for you?
How many guests do you want to deal with on a nightly basis?
At what point would you want help running the hostel, do you want to keep it below that level?

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Andy08

17 years

Hi Guys...

Capacity is something that I've been struggling with as well.. I was thinking of around 40-50 beds and figure I'll just plan around that.. I would like to promote a social atmosphere but see the need to have a large capacity in order to make the venture viable. Economies of scale etc.. Anyone got any thoughts??

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Tim

17 years

I think 40-60 beds is ideal. It's small enough for one person (or a couple) to run on their own, but big enough to make money.

From a travellers' point of view it is the ideal size for a good atmosphere. Too small and there is no one to talk to, too big and it feels institutional and impersonal.

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Andy08

17 years

Yeah I agree on both points. Not sure if you covered this somewhere else on the website, but are you hoping to open a hostel? whereabouts? have you had much success?

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santa klaus

17 years

I think 40-60 beds is ideal. It's small enough for one person (or a couple) to run on their own, but big enough to make money.

From a travellers' point of view it is the ideal size for a good atmosphere. Too small and there is no one to talk to, too big and it feels institutional and impersonal.

From the owners´ point of view that´s the worst size in my opinion. I think a 50-bed hostel is already too big for one or even two persons to run, if it´s fairly full all around the year. After all, you sometimes need a holiday, too. Cleaning a hostel of that size every day is a full-time job alone.
On the other hand, with only 50 beds there isn´t much revenue to be able to hire a great deal of staff, at least not in countries like Germany or Austria where you have to pay 8-10 Euros per hour.
I only know of one hostel in Austria with a capacity like that - the Tree House in Grünau, which only survives because most of the staff are longtermers who practically work for free.
If staff is cheap, a hostel with 50 beds makes sense - that´s why there are so many small hostels in Budapest or Buenos Aires.

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Tim

17 years

I met a lot of hostel managers who say it is the ideal size, but they are people who love running the hostel so they don't mind the hard work.

I guess 40-60 beds is ideal as a starter hostel. A couple can usually afford to set up a hostel this size, and if they work hard and build a thriving business then they can trade up to a bigger hostel in around five years where they can employ people to do a lot of the work.

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maelinva

16 years

I don't know about "perfect" sizes, but the numbers I'm working with are about 20-26 beds, the reasons....well mainly because I doubt I could afford a bigger building in the locations I'm searching.

Also because I want to avoid at all costs those huge packed dorms, ideally 4-6 people/dorm...up to 8 depending on the building characteristics, often you are limited more by the number of windows than by the sq meters...and also because I'm starting basically on my own, with some part time help for the cleaning and some front desk relieve time so mmmm I really can't go bigger and survive, even though I know in a business like this big part of the expenses are fixed (or almost) so profits would multiply just by adding a couple of rooms...but I can't afford it from the beginning.

The big problem with the numbers I'm working with is that with the building prices and the reformations needed numbers are gonna be in the tight side for a while.

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Josh Hostels

16 years

I don't know about "perfect" sizes, but the numbers I'm working with are about 20-26 beds

I've been staying in smaller hostels on this trip and I like them. Not sure what the profitability is like with the smaller hostels, but seems like an easier life.

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maelinva

16 years

Profitability depends completely on the average occupancy and the rent/mortgage costs, with the numbers I'm making with a somewhat conservative average expectation the business would do well enough just to pay for itself (loans, renovations, some staff, taxes, etc...) and make a decent living...which is what I want...if I already owned the building it would be quite profitable, but that's not the case so loans would eat up good part of the income.

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