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models and numbers for US hostels

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menzelg started this discussion 16 years 9 months ago

I have been considering the possibility of starting up a hostel for a bit now and I'm curious about what resources are available for business models and if there are firm numbers available as far as profitability in the short term/long term. I would love some examples of how many years it was before people started seeing a profit. Certainly this will vary but if I was able to get some baseline ideas it would help. I am thinking of opening a hostel in Bellingham, Washington which is an hour north of Seattle and about 45min (minus border time) from Vancouver, BC. It is a college town with a good night life and great hiking, backpacking, biking, skiing, whale watching close by. And with the 2010 Olympics in Vancouver, I predict a major increase in exposure. I am a bit concerned however that with two major cities nearby it may not get the tourist traffic I would need to sustain a place. Does anyone have a similar experience?

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uktrail

16 years

Also look into day trips from your hostel, and find ways of making it easy for people to do them. For example, I would stay there if I knew I could make a trip to the mountains for some hiking and it could be done without the hassle and cost of having to search for a rental car etc. I realise it would not be very cheap to arrange this for an individual, but you might be able to group people together. Islands fascinate people, are any such trips possible there? This would also get people to stay for more than one night.

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menzelg

16 years

I definitely think there are opportunities to provide transportation (I have already been thinking of having a van to take Skiers/snowboarders up to the mountain) Also, one of my potential business partners is a rafting guide and there are many opportunities for that around. The Islands are a bit trickier. The state ferry does go to the islands, but the ferry doesn't leave from Bellingham and the terminal is about 45 minutes away. There is talk of adding a walk on ferry out of B'Ham but as yet not available.

Another point of consideration is that the city just bought a big piece of industrial property right on the waterfront and are now cleaning it up and debating what to do with it. Parks, housing and a promenade are among some of the more popular ideas. It is a 20 year project but some of it may be up before that. So I forsee the city gaining attractions.

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aboriginalhostel

16 years

.... However, there is one negative aspect. Backpackers visiting Britain and Europe are notorious for jumping rapidly from capital to capital, missing out all the good stuff in between. And if you are trying to see half of Europe in 3 weeks, who can blame you? In Britain, the foreign visitors you meet in country-area hostels are most often those who are working in London for a year and taking weekend or short trips.

I think these days a lot of people focus on budget flights, instead of taking trains or buses... Which limits their stays to cities having airports. :(

Although the budget-model is upcoming for buses, I still can't see the competition from the railways... Few years ago it was leading the sector, nowadays it lost about the half of the market. Why can't they make a global pass for 6 months or a year? People would pay the difference...

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uktrail

16 years

I think these days a lot of people focus on budget flights, instead of taking trains or buses... Which limits their stays to cities having airports. :(

So, do you think that occupancy in airport cities is rising, and in all other cities falling?

Do people fly from Berlin to Prague, Munich, Vienna, Budapest, and 'not bother' to go to Cesky Krumlov, Salzburg etc? Or do they only go to those places as day trips from the airport cities?

Maybe hostels in non-airport cities and scenic areas need to get together for marketing.

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menzelg

16 years

What is the major mode of transportation for people visiting the US? We don't really have the same cheap flights as Europe but I know that the prices aren't unreasonable so are most visitors flying? Renting a car? Taking the Bus? The train system here is a joke for sure so I don't anticipate that as a real draw. Does anyone here work/own a hostel in a smaller city in the US? Or have some insight into the travel habits of foreign tourists here?

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Plakian

16 years

I am more than 100km from the nearest airport. There are no trains on Crete. In the spring and autumn (sorry "fall") we only have 2 buses a day. But we do OK! Don't worry - just make it ; you can do it.

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aboriginalhostel

16 years

So, do you think that occupancy in airport cities is rising, and in all other cities falling?

Do people fly from Berlin to Prague, Munich, Vienna, Budapest, and 'not bother' to go to Cesky Krumlov, Salzburg etc? Or do they only go to those places as day trips from the airport cities?

Maybe hostels in non-airport cities and scenic areas need to get together for marketing.

Well, if you look at the hostel growth in the mentioned cities, visitors are definitely rising and I think there is a major role to the budget flights. It is a big unfortunate that most of these visitors are NOT backpackers. Most of them are regular tourists who only stay at hostels because it is cheaper, otherwise they'd rather expect some hotel standards. Also if you've been to these cities recently, there is not much growth of backpacker hostels, as opposed to the budget tourist accommodations (including the ones who call themselves hostels, although they are more likely apartments or guesthouses) are keep rising. You can easily recognize these sort of segment as they don't even have a website or flyers, or even basic backpacker facilities such as reception(!) what you or any backpackers would expect.

When I was in Split, Croatia last year there was only 4 backpacker hostels out of 11 properties. The rest was private apartments.

Budapest has about 20 backpacker hostels out of 100, most of the firstly opened hostels are closed.

Prague has about 15-20 backpacker hostels out of 60.
The Boathouse almost had to close few years ago, although it is one of the oldest and best hostels in Prague. Luckily they could make it.

If you take a closer look of Cesky Krumlov, Salzburg or any non-airport cities, it's been years since there was a new hostel opened and as a well known example: in Scotland there is even YHA closing or changing their hostels to fit the new visitors demands. :(

I rather think that backpacker hostels should get together for marketing.

But as this thread should be about "models and numbers for US hostels", I suppose this thread should be rather in the Hostel Trends section. ;)
Sorry for that!

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