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Payments

Start a Hostel

ALEXA JULIANA started this discussion 12 years 1 month ago

Good day everybody!

We will open a new hostel in Pereira, Colombia and we are not sure about how to receive payments before they show up. If you want to make a deposit in Colombia, from other cities or countries, the bank will ask for a fee. Which is around $10.000 COP domestic. That is a bit too much if you have beds which are $20.000 COP.
Our question is, can we trust our customers to pay in the hostel? Will they show up? Or how can we control this?

Many thanks in advance,

Alexa Juliana
Kolibrí Hostel
www.kolibrihostel.com

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Rucksack Brian

12 years

You could set up a Paypal account and accept pre-payments that way. If you have a credit card machine in the hostel you could ask guests for a CC number when they make the reservation and charge them in advance. Some people may be very hesitant to give you thins information. Most of the booking sites provide a booking engine that you can put on your website to take deposits. (The booking site that provides the engine will keep a part of the deposits though)

Our question is, can we trust our customers to pay in the hostel? Will they show up? Or how can we control this?

Whether they pay a deposit or not, there is no guarantee that they will show up or that they will pay. Some won't, but most will. There is a lot of trust in the hostel business.

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ALEXA JULIANA

12 years

:) Thank you so much for the answer.
I think we will trust our clients in the beginning. When we get more popular we could use other techniques for receiving a deposit!

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DarrenOverby

12 years

Hi Alexa,

Congratulations on starting a hostel! I have asked my business friend, Alex Torrenegra who is from Colombia, what he thinks. Alex is the founder of wehostels.com.

But in the meantime....

I think it's a perfectly fine strategy to use trust. Usually when a hostel is just starting out they are not going to be full that often. If you are not full and someone doesn't show it's a bummer, but financially it's no worse than if they never called at all. When I was first starting my hostel 20 years ago we didn't accept credit cards so we asked people to sincerely "Promise, Promise, Promise" that they would come (yes, we made them say it on the phone 3 times) or at least call us to cancel. I explained that if they didn't come or cancel it might mean another backpacker doesn't have a place to sleep because we would be holding the bed for them! I found that if you create a "personalized visual picture" of the real people involved, people tend to mostly do the right thing.

Best of luck on your new venture!

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ALEXA JULIANA

12 years

:D Hi Darren!! Thank you so much for the advises, I'll follow the rules: Trust and make my potential customers to promise me that they will show. Greetings from Colombia and Kolibrí Hostel Pereira.

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DarrenOverby

12 years

Hi Again Alexa,

Just saw this today and thought it might be of interest to you or other HM members. Looks like PayPal and MoneyGram are joining forces. This means you will soon be able to accept money via PayPal and withdrawal it from MoneyGram locations in 196 countries.

Darren

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BananaDesk

12 years

Wow, sounds very interesting..

I've been living in Argentina for a couple of yrs now, working with hostels, and not having PayPal is a bummer. PayPal for now still doesn't allow users to connect with an Argentine bank account, so there was no way for a hostel to take advantage of using PayPal. Even if an Argentine went to the US, set up a bank acct, and then connected it to use with PayPal, he wouldn't be able to withdraw the cash until he traveled back to the US. The new Moneygram connection may help ease that pain :) It'll be interesting to see how currency conversions will be handled when depositing through Moneygram to a PayPal account... I believe PayPal only keeps accounts in a handful of currencies? Does anyone have more info on this?

-Tim

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