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Starting a hostel in California - definitely a need, yet so expensive! Funding suggestions?

Start a Hostel

Kaitlyn Burke started this discussion 6 years 9 months ago

Hello,

I am in the process of researching and writing a business plan to open a hostel in my home state of Califonria. I have always wanted to start and run a hostel after years of traveling and working in them all over the world. My biggest problem I faced when brainstorming was trying to chose the LOCATION to kickstart my dream. Although idealiy I would like to be somewhere in Europe or Central America, it is too dificult with the visa and business laws as a foreigner.

After returning home to Califonria for a visit I realised the complete lack of hostel choices for backpackers traveling within the states. There is only about 300 hostels in all of the USA, compared to over 10,000 in Europe. Talk about a need! Also, my town is a great locations, as it is located near the coast on the Pacific Coast Highway that many travel to go between San Francisco and Los Angeles. There is no doubt in my mind that a hostel is very much needed and will be used!

My problem is California is so damn expensive! The more and more research I do and progress I make on my business plan, the more convinced I am that this could be a success. My drawback that I have no idea how I am going to fund this.

I could possibly get some some loans from close family and even potentially a business loan, but I still dont think that will be anough. I know that my other option is to find investors, but I wouldnt even know where to begin something like that. Also, it is not like hostels are very well know or recieved in the states and I can't imagine many investors are going to chose hospitality and lodging over other potential options.

How would you go about getting the fund neccessary to move forward?

Any advice would be greatly welcomed!

Kind regards,

Kaitlyn

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Rob_in_Mission_Beach

6 years

Kaitlyn,

I was showing my friend - a hostel owner in Lithuania - this thread as we were looking at hostels for sale togher last night, then she saw this post and was like, did you write this? I was like no, but she is probably in Santa Barbra, SLO, or Monterey county, but you said the middle so maybe SLO.

I've had nearly these same thoughts as you. My father and I have been looking at properties, but he is unsure of the need which you partially expressed above with your 300/10,000 ratio. He also wants a business plan… He and many Americans don't seem to understand the European love for staying in Hostels, nor that same fondness that comes to us after living abroad in hostels for months at a time. I agree, there is a big demand if done right.

I think the problems are yes, the cost, but also liability or fear of liability, and just a total lack of vision unless you've personally seen it. I have back packed in hostels for a total of nearly a year from various multi month backpacking trips. Sounds like you’ve gone far beyond that. I’ve never worked in one, but befriended a few hostel owners and stayed with and learned from them for multiple weeks.

One question, are you in or near SLO? I’m 15 minutes from SLO in Santa Margarita saving for another backpacking trip. If you are in SLO, It would be cool to grab coffee, learn about your experience and insights, and also bounce California hostel ideas off each other.

~Rob

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whereiskait

6 years

Hi Rob,

I tried to send you a direct message to discuss this further but I can't seem to figure out how to do so. Can you please send me a message?

Thanks,

Kaitlyn

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Rob_in_Mission_Beach

6 years

Sure, done. Didn't mean to hijack your thread, So, if anyone else reads this and has any insights into these quetions Kaitlyn has raised that would be great to hear.

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Hsunami

6 years

Hi Kait and Rob,

I was just stationed at Vandenberg last year but am living in Korea now. I think your best bet on the central coast is Santa Barbara as it can receive lots of international travelers. Airport itself is small it it’s not too far from LA and there are ways to get there via public transit for the backpacker who wants to get out of LA a bit. SLO and Pismo Beach are nice areas but definitely more local destinations for Californians. I don’t think they’re great areas since public transit isn’t too good and the airport isn’t that big (although bigger than SB). Or were you thinking further north on the PCH by Big Sur? Could be a viable option. Anyway, I’d like to track your progress and lessons learned since I was thinking about opening a hostel in CA in the future as well, will you be blogging about your experience at all? Thanks, best wishes.

Mike

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