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Starting a chain of Hostels in Asia

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Chris long started this discussion 7 years 6 months ago

Hi there,

Im a traveller of 5 years full time and a friend and I are thinking of starting a chain of hostels. Can anyone tell me how hard this would be to start in Asia. Countries like China, Philippines, Thailand, India and Indonesia among others. I know this sounds like a nieve question and but i am expecting that the answer will be "very hard" but can you elaborate for me how hard is it!

Thank you!

Chris

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jason_noronha

7 years

Hey Chris,

Having started a chain of hostels in India, I think the hardest part is starting the first hostel. Once you've got the first hostel operational, you've been through the grind and know what to expect from the second and third.

The advice I would give you is to give yourself the best possible odds of success with the first hostel. Pick a place with the least amount of competition, build a business plan that would succeed in the worse case scenario and start off in a market (location) that you understand the best. Having lived in Singapore, Indonesia and India, I am familiar with the ground reality of businesses in these countries and would be happy to help. Drop me a note if you have any questions.

Cheers,

Jason ([email protected])

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kayaker89

7 years

First of all Thank you Jason for your awesome comment!

Sounds like you are a good person to talk to!

What is your nationality? And are you a foreiner in India? And if so did that make it alot harder to get started like did you have to get local parnership, and that sort of thing?

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jason_noronha

7 years

Hey Chris - India allows 100% FDI (foreign direct investment) so legally it's not a problem for non-citizens to do business. However, practically speaking - that's a whole different ball game. I would highly recommend partnering up with someone who speaks the local language because that's how you get Government work done (licenses, registration, etc. etc.).

I got your email and I've responded in more detail there.

Cheers,

Jason

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Rucksack Brian

7 years

Expanding on what Jason said, getting your first hostel up and running is the hardest part. Your second hostel will probably make you restructure some of your operations, and force you to split your resources. Your third hostel is probably the key to a chain. You can’t split yourself very well between three hostels (at least not in the long run) so you will HAVE to have clean and clear operations with proper management and procedures that allow each hostel to function independently within your business structure. With that set up, the jump from running three hostels to running five or even ten isn’t so big. At least that’s the conclusion that I came to when I considered expanding my own operation.

Jason, as someone who as carried that expansion out, would you agree with my assessment?

If someone like Chris had the plan to open 3 or more hostels from the very beginning, are there things you would recommend doing or avoiding from the start to ensure a smooth development?

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jason_noronha

7 years

Brian - totally agree with you. I would also not even think about starting 3 hostels at one shot. That sounds like the perfect recipe for disaster. So unless a rich uncle left you a lot of cash (to burn), that plan's a complete non-starter :D

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Jugaadu

7 years

Chris, you can contact me at [email protected] and we can discuss this.

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