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Starting a hostel as a side business

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Peyton Lombardo started this discussion 6 years 5 months ago

Alright hear me out before I’m attacked. I want to start my own hostel but I don’t want to quit my day job just yet. I know it’s going to have to happen eventually. But I’m just wondering if it’s possible to start as a side business. I’d like to scope out locations in my city (Denver, Colorado) and potentially buy a property (8-10 bed Victorian house) with family/friend loans and start creating on the weekends. Buy the bunks, outlets, WiFi, etc etc.

When it’s closer to opening time, I would like to hire a general manager to be the point of contact in the hostel. Of course there will be other receptionists and such, but the general manager is the person that deals with all the issues when I’m not around.

Does this seem even potentially viable? Am I simply kidding myself? I would love to hear any critical input you have. I eventually want to do this full time and own multiple hostels in cities across the USA but want to test out the waters before I dive in head first.

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cmloechl

6 years

There are many hostel owners who have started while having full-time jobs. I can think of 3 or 4 in the US off the top of my head. Some quit before opening to fully focus on the hostel, so kept jobs all the way through.

That being said- it will largely depend on everything from how much other help you have/ resources to how much sleep and social life you need. As well as your timeline- like anything, doing something part time will usually take longer to get off the ground. One complaint I heard recently from a still-working hostel owner who is not yet open was how hard it has been to coordinate with vendors, contractors, etc. who only work 8-5 while he is also working 8-5. Lots of tricky scheduling and running around the city back and forth between the office and the property.

If you can afford a full staff including a well trained GM then it's possible you don't need to quit once open. But plenty of systems will need to be in place so that you are not required to be there or frequently contacted. Hope that helps!

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SilverSeagull

6 years

You will need a maintenance person, cleaning personnel, receptionists, manager. I doubt that the income of 8-10 beds will cover your expenses in salaries, if you yourself will not work as a full-time receptionist, manager and maintenance. And there also will be other expences.

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jenayarockman

6 years

I agree with SilverSeagull, 8-10 beds is pretty small in order to afford paying many staff. Be sure to do a financial analysis before you get into a property. This involves looking at what price you think you can charge, together with anticipated occupancy to determine your income, then what your expenses will be (including loans if you have investors). Oftentimes when it comes down to the numbers, even an awesome looking property just isnt finanacially viable. If you want an easy spreadsheet to get started on an analysis let me know.

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tiger paw hostel

6 years

A lot of good points posted. I started my hostel when I was a full-time teacher. That being said, the labor prices were low enough to afford a good manager. I quit in two years once the business really got going.

There is a hostel in Charleston, SC (can't remember the name) where the owner is a full-time realitor and it does pretty well. The guests can't check-in until the afternoon but she has a maid that let's them in to hold their bags. She has a very small staff and it works for her.

My adivce would be to look the owner up and call her. It's the only hostel in Charleston so it'd be easy to Google. As I recall she even wrote a book about starting hostels. =)

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