We hope the information presented from various industry leaders from around the world will help as you continue to make important decisions affecting the future of your work in the hostel industry. Stay safe out there!
SHOW VIDEO TRANSCRIPT
Darren Overby (00:00): Hey everyone, a lot of hostels have been reaching out to me to ask me, what is my opinion about the state of the world and how is the Kovac 19 situation going to affect the hostel industry longterm? And I apologize for not getting back to you, a lot of you as quickly as I normally would. To tell you the truth, I've really been battening down the hatches at my own hostel and going into what I call hibernation mode so that we can weather the storm ourselves. But I am optimistic about where we're going with the industry longterm. But I wanted to do a video for you. And fortunately the guys at hostel road trip podcast reached out to me and they wanted to do an interview as well. And those guys are great. They have great energy, they have great passion about the hostel industry. And frankly, they actually make me look a lot better than when I'm just talking to a camera with nobody else in the room. So rather than repeating myself, I figured I'll just cut right to that interview. And that's what today's video is all about. Darren Overby (01:09): Hey. James Black (01:10): Oh Darren Overby (01:12): Good. How are you? James Black (01:14): Good, good. So we're just setting up the record now on, on rants. So just give us one minute here while our guy gets gets his gun. So it's a good record. Oh Darren Overby (01:24): Yeah, sorry. You Bobby. Good. How are you? James Black (01:34): All right, here we go. James Black (01:37): All right. Welcome back to a pathogenic mini series on the hostel industry and status of and our daily updates here. We're very excited to have Darren Overby, a very accomplished hostel Jetta I nights. It was the founder of hostel manager.com. He's also the owner of the Pacific trade winds hostel. And at one time you, you actually own hostels.com I believe. So you're a very well established individual within the industry. So we're very excited to get your insight on some of these really related unknown and unprecedented situations that orient. So thanks so much for being with us. And I've got Bobby Dyer with me. Be with you guys. Thanks for coming. Dan. Darren Overby (02:26): James. Hey Bobby. Thanks for having me. It's been a long road, that's for sure. James Black (02:32): Yeah. Yeah. So I, I'm interested to see what that long road experience and it shed some light off. And just to kind of open up with what are you kind of feeling about in that the state of the world and the hostel industry in relationship with the state of the world? Darren Overby (02:48): Yeah, well, I'm no doubt about it. You know, like, you know, this has been compared to a war. It's, it's kind of like a world world. Fortunately it's not humans fighting against each other, but we are all fighting against a common enemy and there are going to be casualties. There already have been casualties both in terms of life and in terms of hostel closures. And there's a lot of pain out there. We're seeing particularly coming from Europe, but even here in the United States where we're a little, we're like two weeks behind Europe. You know, there have already been closures of hostels some permanently and it's, you know, it's really heartbreaking when, you know, you've worked so long in the industry and you, I mean, even in San Francisco, we become friends with our competitors here. And I was, I was really sad to see that when USA hostels decided to close their doors. James Black (03:50): Yeah, yeah. The bits such a fake player and an operator right there. We both worked there and got our start there. So it kind kinda does rattle you when you see kind of some of the pillars or exemplars in the industry start to close down and starts to bring question to whether or not, you know, you're going to be able to survive it. And you know, how are things going to local? We'd come out on the other side of it, but yeah. What as far as how do you think a hostel once we get through this, how will come in the travel industry, how will, how will hostels bear? Darren Overby (04:26): So here's my belief is, and this is based on, you know, 30 years of seeing the ups and downs of hostels throughout the world. And you know, traditionally we always just saw like different pockets of things where different regions would have different ups and downs, but hostels will be the first out of the gate and the first to recover from this when we come out of it. You know, because our demographic, they're the most adventurous. They're the most pioneering, they're the most invincible sometimes to our detriment right now with covert 19 cause they're the ones who are like, I'm going to go to spring break cause I'm going to live forever. So keeping all of those things in mind about what our demographics are, I believe that, you know, hostels will recover fastest of all. And it's really important for those of us who are going to stay in this industry to be ready for that recovery and position ourselves during this time. Darren Overby (05:30): So a lot of times there's a lot of hunkering down right now and reformulating plans, particularly for hostels that have closed. This is an opportunity to say, take a deep breath because normally you're just like, you're at the whim of your guests. You know, everyone knows who, who runs a hostel. They know that they're, it's a very hectic lifestyle. You're constantly playing catch up. So I believe that that may be a silver lining in all of this. But I draw also from that is that when you look at various tourist destinations around the world that are now the, the newest up and coming destinations the start of that, the pioneers of that destination were backpackers. They went there. There was a few people who like went to a seaside town. I was just in a Pardot, Escondido in Mexico, I think it was probably a year ago now. Darren Overby (06:26): I was visiting a friend there and it was right in that transition point. Hostels, there was a number of hostels there. It was a great scene, you know, in the town. And then what happens is that, you know, big travel Capitol sees that and now they're building the resorts there. And so we always have like blazed the trails and I think we'll blaze the trail back when this is. And it's part of our demographic, it's just who we are. And then the other thing that's gonna really help is that, you know, when the recovery happens, it's not going to be overnight, but I think we're going to see really cheap airfares around the world for a year or more. And a lot of backpackers are going to jump on that and say, I'm not afraid they're going to go. So it's just a matter of hostels being positioned to actually like take advantage of that. James Black (07:27): Yeah. Yeah. It is definitely nice to have a, you know, one positive thing you could have some time to adjust your marketing, revamp your website, and then organize strategy going in. And and then also as you're saying, you know, hustle being an affordable travel option. I think coming out of this, everyone's going to be, you know, looking for that most affordable way to get to a destination. You know, compared to say luxury travel, no one's going to have time to really do luxury travel on the up end of this. Right. So it's a good point too. Now you mentioned that which we've seen too and we've tried to use that as a silver lining of, okay, if we can get to the other side of this, there's going to be less competition from the sad point that some hostels closed. There's going to be a lot of cheap flights and hopefully a pent up surge of travel within our brave millennial demographic that will be the first ones. And that's very gives me a lot of competence to hear you say that as well. But how do you suggest, you know, that's the end point and what we've been trying to figure out talk to our people and give them competencies. How do we get there and how we can get through this shit show to get to the other end of that. So we are in that position to take advantage, Darren Overby (08:39): Right? Small hostels. When I say small hostel, I mean an owner operator live on site. Hostel has the best ability to actually weather this storm. Because it's their home. Now they're going to to be very nimble through all of this there. They may even like myself, I'm actually looking for jobs. I'm doing consulting work on the side because the income's not coming in from the hostel. But you know, I actually kind of long for the days when I actually lived at the hostel when I first started my hostel and you know, it would have been a much easier because of all the things that my guests need, deliver the same things that I needed. So it's for those types of operators, it's really about, you know, like reducing your expenses as much as possible and you know, riding out the storm and you know, taking in whatever, optimizing whatever income that you have coming in. Darren Overby (09:39): And this is actually true. This is true for medium size hostels as well. You know, reducing income, pivoting your marketing. So like we're trying to do more of longterm stays where now we're doing one month stays because there are still wayward travelers out there who have found themselves away from home. They don't really want to get on a flight. And so we're really having to accommodate those travelers where normally we have a maximum stay. We've had to kind of do away with that. And it's basically what I just called, you know, kind of going into hibernation mode, medium sized hostels or hostels that are not owner operated like myself. Like I have a manager there now it becomes much more challenging because you have more expenses during all of that. So I've really had to like talk with my staff and you know, we actually, unfortunately we had to lay off our staff and you know, I'm encouraging them to, you know, go get unemployment. Darren Overby (10:44): And when it's all over I'll hire you back. But it's, you know, it's necessary in order for us to actually keep paying the main bills that keep the building and keep the structure. And then I think big hostels. I think what you'll see is some of them will close, but by and large there's huge reserves of capital and some of them will just like pull out that capital and they'll double down on the hostel industry. And I think when you come out of this, you'll start to see new chains arise from, you know, venture capital says, you know, because they'll see us coming out of the gate first. Bobby Dyer (11:21): Yeah. Darren Overby (11:22): Those hostels, they're just so resilient. Bobby Dyer (11:25): Yes. Darren Overby (11:28): Really hard to see that from this perspective because we're really, right now we're just really in the trenches and it can be very disheartening. But I think a lot of this sort of stuff, the video we're on hostel management, we're wanting to start doing some weekly happy hours where hostel owners can get in. It is BYOB. You have to, Bobby Dyer (11:49): You have to bring your own Darren Overby (11:50): Camera and your own drink. But just, you know, just to have that community that we, most hostel owners, they really thrive on community. And that's, I think can be depressing when you, it's like you have no one in your building. So yeah. So the extent that we can actually stick together, we'll get through it. James Black (12:09): Yeah. And that's a really cool thing of it. Two points I want to touch on. You brought up the, when you aren't owned and occupied as I am, I live on site. I was telling the staff that also off the exchange, you know we're in a lot better situation than most because half of our battle of having a roof over and in meals is taken care of by this operation. So if we get the operation going then we're not looking at that. So that's definitely an advantage there. And I think that's a really cool idea you have from the community. They meet up perspective on hostel management because one thing that we noticed right away was that he had all of these hostel groups on Facebook that were dorming sites that hadn't that activity on that years. And all of a sudden you see this influx of people chatting and trying to talk with each other. And I really hope that they channeled their foot, you know, focus towards HASA management.com cause it's such a great resource and I think it could be a great opportunity to get that community together on that platform. Darren Overby (13:06): Yeah, we do have a virtual a room on hostel management right now it's actually on a platform called whereby.com whereby.com/hostels and up to 12 people can go in the room and it just sits there all the time. Anyone can just go in the room, even if I'm not there, people can just meet and talk about hostels. Now what we actually need to start doing is actually have some preset times when people would meet. I think what happens now is people go in there and they're like, there's nobody here. So then they leave, you know, obviously people are talking on what's happened things. So anyone's actually can use that, you know, resource and go on there and just say, Hey, let's just meet on the video thing. And it's really nice because it's just, you don't need any special software or registration. You just like pop in the room, you know, pop in the room and then there you are. James Black (14:00): I was just going to add to that for things hostels can do to survive is definitely stay up to date with the current local laws, city laws of what a tax tax breaks or rent breaks and you know, are available. It's each state and city kind of has different things to help you out. So definitely stay up to date with what's current. Yeah, yeah. It does change from city to city reset city of San Diego and put a six month moratorium on all hostelity commercial businesses for their leases. So that was a big relief to us for that. I'm like, at least if we did get in that situation in the coming months, there's a backstop that we could get kicked out and would have time to get to the summer. Darren Overby (14:39): I'd love to see that in San Francisco. James Black (14:43): Yeah, I was saying [inaudible] as mine vote next term. Darren Overby (14:47): Yeah. Yeah. Because I do think that hostelity has been hit probably harder than everything to all of these other businesses. There's, I've see restaurants and I would never want to be in a restaurant industry because those people work so hard. But at least they can pivot to take out now what about hostels that have fallen or just start to fall? And if I see half of them, yeah, I would say, you know, don't lose hope if, I mean if your, if your passion is hostels. And you know, just because this particular hostel that you were running is closed now doesn't mean that you have to go off into some other direction. It means that you can kind of, you know, a rise from the ashes later as something even newer and better. And again, it gets back to, you know, thinking about like what kind of hostel do I want to run in the future. Darren Overby (15:44): And you know, most of us who've actually stayed in a lot of hostels in the world, the hostels that we know and love are those small owner operated hostels that have an amazing vibe. And you know, the bigger ones like, yeah, they're a cheap place to stay. And sometimes they have amazing facilities, but it may, you know, some people may say, you know what, when I do this again, I'm going to downscale, I'm going to do something that's much more manageable that, you know, is my, is my place really kind of be thinking about like, you know, how can you, you know, come out of this and do something slightly different than what you were doing before. Now that's not to say that anyone did anything wrong. Like in this, you know, some of the nicest hostels, I just see that it's like it's practically their home. Darren Overby (16:35): We were going to be launching the a hostel professionals library, which is basically all of my knowledge from my 30 years of running the hostel. And I was really trying to get that all perfect. It's a lot of the notes and things that I've developed for my own hostel over the years and I was trying to get all that all perfect. But during this particular time we decided, you know, a lot of people are going to have time to actually read these things. And so we actually say there are certain articles that say request access and it means that it's an article that was really written for my hostel. And if they request access, then I'll go through it and adapt it for a more general audience because just the way we do things that are hostel isn't the way every hostel needs to do things. Darren Overby (17:20): So the hostel professionals library, it will be a place where people can like, you know, refine their plan, think about other things. There's just, there's so many different articles that are in there. So yeah, and that's what I would say is just, you know, like for the people who've already fallen, you know, keep the spark in the back of your mind because you can reinvent yourself again. You can do it again. And there may be different choices that you make the second time around that you can keep your operation as lean as possible. James Black (17:58): Yeah, I agree. I agree. I think you know, when you start a hostel, it's from that host. You love hosting travelers and that community vibe. Like you said, sometimes you think you just got to keep growing and add more beds and there'll be making more and more money, but it's Haas and be happier. That's not necessarily the case in a hostel because once you get so big, it's hard to be intimate and really get to a true host and entertain your guests. You know? So we've seen, we've kind of downsized so we can be more intimate with our guests and that mindset. And it's become much more enjoyable. You get to connect with the guests more and ultimately, you know, you see more guests smiles. So yeah, they know. And we were talking about this the other day because as you were saying, to hit on another point is that you're, you have this reflection time now seeing vulnerabilities in certain different operations. James Black (18:42): You know, the differences of owning a building compared to leasing a building. We have both wildly different in this situation. The different cities of having a hundred beds or 50 beds, wildly different compared to the, not that you're carrying on a month to month basis. It will be used to be by coastal. And had a place on the Northeast and out here up until last year because does, Bob was saying, we were noticing that we were losing the intimacy in our locations and having less than joint and also ourselves and we're so thankful that we had already gotten out of that project because I'm like God to be by coastal right now and have to worry about multiple locations in different areas. It's nice to be in Southern California and that's it, you know? So that definitely is a good reflection point to look at the way you've got things structure and how you could restructure your model going forward to be a little more impervious and less vulnerable to these types of things and more manageable yourself so that you're able to get through these times. Right, right. Darren Overby (19:43): I was just going to share something else that we've done. So we're really trying to also maintain our connection with our hostel community. So we've emailed all of our hostel community. We've started doing San Francisco hostels club happy hour also. So where former guests can actually get together because they may actually want the spirit and the comradery of the hostel even though they're in their home. So we're trying to remain engaged with our guests there. And we actually did a gift card campaign where we basically said to our guests that they can buy a gift card. It's a virtual gift card that they can use for future stays when we reopen. And we actually said to that like, if you use a gift card of any amount, you'll get a 25% discount on that future stay as well. And within about a day, day and a half, we made $1,500 just in people who I was just so blown away, outpouring support and people who were just like, they were gushing and I was gushing of like, you know, that's my favorite hostel. Darren Overby (20:54): I met my best friend. They're like, they really, really came out and wanted to support us and it was just huge. And if, if it, if, if I needed the, you know, if I needed that little thing to say, okay, am I going to weather this storm or you know, especially at my age, am I going to retire? Is this going to be it? But when I actually saw the immediate response, I'm like, no, we have to keep going for these, you know, for these, you know, the next generation of travelers who are still enjoying the hostel. So I encourage hostels to do, do that as well. And I think it was also successful. I heard about a hostel in Europe that did gift cards and you know, you know, these, especially these, you know, the hostels that they have this cult following, you know, and they will come to come to bat for you, which I was amazed because I figured everyone's going to be, have low income, you know? James Black (21:49): Yeah, yeah. People are strapped, but I think that's good. We're actually in our original house that we started, it kind of retreated into this for that kind of same type of feel and inspiration. It has been really cool to be in this house and see a lot of the original paintings and murals. I love the mural. Yeah. Things all scribed on the walls and it's kept us going in that way as we've continued to get feedback as you have from prior guests and staff about how are we doing, you know, pushing for us to get through it. So that definitely does keep you going and it's definitely inspirational to hear that and some really cool ideas from you on that as well. Yeah. Now, did you have anything else? Anything else in closing down that you wanted to share? No, everything's fantastic. Keep the faith. Yeah. Darren Overby (22:34): Faith stick together. Reach out to, you know, other hostels in your town. You know, even people who were, you maybe were traditionally thought of as competitors. I know, like in some cities in the world, you know, competition is really cut throat, but this has a way of softening everybody up. And I honestly believe that, you know, competition doesn't have to be cutthroat. You can actually help each other during this time, but also reaching out further a field. And you know, there's a number of communities on hostel management and the world hostel community and you know, that you can actually find other hostel operators that are going through the same thing as you are. And it's just, it's just nice to say figure out like that you're not the only one. So James Black (23:24): Absolutely Darren Overby (23:26): Get through this. And like I said, you know, my belief is is that we will, we will recover faster than other segments of the travel industry. So James Black (23:36): That is great. No, that's it comforting and inspiring to hear from you. So that's a, I'm sure a lot of the listeners will also feel the same way. So thank you. So for your time, I know it's an interesting time and I appreciate the the time to do the interview and we'll definitely be staying tuned into hostel management.com for all these cool new features coming as we all have the time now to do this. But thank you so much and all the best to you and your team up there. Darren Overby (24:02): Hey, all the best to you guys too. And just reach out anytime. Maybe. I mean, we can just have a beer online. All right. Talk to you later.