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Ricky started this discussion 15 years 5 months ago

Hi all, Im investigating the possibility of a UK city hostel of around 100-150 bed.

I find myself estimating cost more than i would like and so would like to put some questions your way.

Staff costs - what do people pay their receptionists and do you increase the rate for night work (im thinking a 24h reception will be needed) And how about for cleaners?

insurance - this will undoubtedly vary with building size, location, etc but a rough idea would be nice, also what types of insurance do hostel owners required to take?

Laundry - For customers use, I was thinking of leasing some washer-dryers, anyone know a good UK company or is it best to buy them? and for all the bed linen is it best to do it in-house or send it out?

Thanks for any help
Ricky

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PatrickO`D

15 years

Hi Ricky, Here in the US, the department of Labor keeps stats on positions within Cities, Towns and States. Check the Dept of Labor website for the UK to see if they hold average pay scales for the positions in question. I strongly recommend 24 reception, regardless of the size of the hostel. If you cruise this forum enough you will find some horror stories regarding staffing issues in hostels, learn from other people's mistakes. Generally, HK is the largest of all the Departments because it is the most labor intensive, and poll after poll has shown cleanliness is the most important aspect when a guest rates a Hostel.

Good Luck

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nyrie

15 years

hi. at our hostel (in australia) we have found a company that puts in coin operated washers and dryers for you, looks after all the maintenence and lets you have a profit split. (this increases the longer your contract is). its an easy way to bring down costs. we send our linens out to a company called the house with no steps. this is a company that employs people with disabilities. they are generally cheaper than other companies. if you have a hostel of that size, it maybe better to send linen out at $1 per sheet than paying staff to do it on an hourly wage. 24 hour reception does stop a lot of problems and its worth spending a bit more money to give you that peace of mind. good luck

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Scotch Argus

15 years

The need for 24hour reception comes down to location. At a city centre location you will need it I think - as there are too many possibilities for outsiders to try and sneak in who are either with paying guests or not. If this hapens it can create real problems for you. In the current labor market you should be able to get someone for minimum wage in my opinion, although often staff will expect accommodation. Having at least a couple of staff members on site can be beneficial to you as well.

As you say, insurance will vary wildly for differing buildings - you'd have to contact and insurance broker or similar to get ideas on this. You'd need pulic liability insurance, employers insurance, and fire. You'd really have to contact a specialist in the field to find out costs for your size of building.

Personally I'd buy coin op laundry equipment - you should be able to re-coup the cost from customers in a few years, and if the equipment is new it should last as long as it's commercial grade. We have speed queen machines and they have worked fine so far. If you have 150 beds and you want to do your own sheets you'd need at least 3 machines and dryers. The only way you can save money by doing them yourself is if you can get exisiting staff (eg reception during the day or night duty staff) to do them. If you are going to pay someone specially to wash sheets you may as well get them done commercialy.

I don't know where you're planning on setting up, but make sure there is a market there. This to me is the most important thing. Don't just assume that if there is no hostel that yours will automatically be successful - people have to have a reason to come to your city. On the flip side, if you are setting up in a place with big tourist traffic make sure the market isn't saturated. For example Edinburgh is a tourist/ backpacker magnet, but outside August there are so many beds it's very cut-throat.

Good Luck

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PatrickO`D

15 years

Regarding laundry machines, I think you have to weigh up the pro's and con's of Buying vs. Leasing. In the US leasing equipment can be a tax right off, and if the machine breaks down the vendor will be out straight away to fix it because of the profit sharing. If you buy your laundry machines inquire if it can be a tax right off in your country. Also consider the "total life cost" of a machine when buying it; there are math formulas that can help you do this. In the US we have the energy star program were a business gets tax benefits for buying energy efficient machines, inquire if the UK has a similar program.

All the Best

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