I am newly registered at this forum but I've been reading it with great interest for quite some time.
I am working in the hotel industry as a revenue manager, but - for some years - I have the idea of opening a hostel in my hometown.
After some research I did, I am not fully convinced if this hostel can be run profitable due to the market conditions I have at this location.
And I'd like to get some opiniones about it by some more experienced guys in that field, as I hope you are.
Here are some facts:
The town is in Germany and has got around 50k inhabitants. Outside of the main cities like Berlin, Cologne, Munich or Hamburg Germany does not seem to be the first choice for backpackers, but there are hostels popping up even in smaller cities and areas less busy.
- in town there is only one youth hostel, few AirBnB offers and some hotels, mostly 2-3 star rated
- during summertime there is a lot of bycicle tourism
- there is a small private college in town with less than 1k students per year
- the town is situated at a river surrounded by hills
- reasonably well established public transportation with busses and train connection
- average OCC in the hospitality sector in town (counting 10 beds or more per host) is one of the lowest in the (federal) state with 20-25% during winter time and 30-35% during summer time
- next major city with an international airport ist about 80 km (50 mi) away, although easily accessible by train
- no real 'nightlife' in town (a club, several bars, ... nothing special)
- necessity to fill the house with very different guest segments during low season (autum-spring: school groups, beds for workers, maybe students) and high season (summer: backpackers, bed&bike guests, other transient leisure guests)
- it's hard to get solid numbers how big, in terms of potential customers, the market is for a hostel in my area (for convincing potential investors)
So, my question is, with these given pros and cons, do you think a hostel can be run profitable (regardless of concept, etc.)? Especially regarding the low occupancy on average and the difficulty to establishing solid numbers for the potential market size.
And by profitable I mean running it with strengthening its financial basis from year to year while still generating a solid income? After all, it is still a business and in a mid- to longterm view I certainly do want to get "more out of it" than working as an employee.
Thanks in advance for your answers and thoughts.