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I am thinking about the possibility of extra business.

Tour Desk Operations

Peter started this discussion 15 years 6 days ago

I am currently at the situation when , there are too many hostels in the town, and basicly the hostels do not make money , supply is bigger than demand.
Of course the strongest survive by experience and good marketing , but still they just survive.

I am thinking about the possibility of extra business.
There is the possibility to work as a hotel booking agent.
I mean , having small office , having good web site , or registering hotels at a good web sites , you can have the commisions from each hotel or apartmetn on a different conditions and agreements.
I am just thinking , how profitable can be this activity comparably with hostel running .
Is it more worthy to invest your energy to a good hostel in these hard times or to invest to the booking agent service is more perspective ?

The one can invest to the intermediators service , as the one who gets good commissions from the hotels
or the one can dedicate his activity to the promoting , advertising , marketing of his hostel.

I noticed that these guise who work for the commisions , they never loose.
I mean , you can make some money on Summer as a hostel owner and you must spend those money on winter .
But intermediators , they always make their money , some times in low season they get much more commissions than in high season.
And some times on winter they make more money than on summer
Of course , you must have a good web site , and not to be lazy to visit about 30-40-50 hotels , hostels by offering them your intermediary service.
And of course , to negotiate a good commissions for your service.

The matter is that , in some areas , the hoteliers and the ones who have many flats , they do not know how to advertise.
And frequently they use the intermediators service and are ready to pay a high comissions for your service.
In some way there is a lack of beds in a big cities , but in some way all these huge and small hotels are half empty or totally empty , and in their marketing departments many of them are not experienced in internet advertising.
For example , as I heard the owners of hostelbookers.com , probably the second best hostels web site
are the people who came from the budget hotels and hostels business and they are still in the hostels business now .
Of course , I can not compare it with my calculations , because I shall never achieve this level and this capital .

I am not good in mathematics to compare the profits perspectives of two different activities , and of course the hostel running its more about what ''you like to do'' in your life than about just a ''profit'' , but still , what activity is commercially more profitable ?

Or lets formalize my question in this way ; - why do you think it is more prfitable to be a good hostel owner than to be a good hotel/hostel booking agent ?

From commercial point of view , how many hotels should you have in your arcenal , if you get from 10 till 20 % commisions that your income would compare with income of a good hostel ?

Why is is more profitable to have 30-40 beds hostel than to have 30-40 hotels , hostels and apartments and and to get a good commissions from them ?

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Josh Hostels

15 years

From commercial point of view , how many hotels should you have in your arcenal , if you get from 10 till 20 % commisions that your income would compare with income of a good hostel ?

Why is is more profitable to have 30-40 beds hostel than to have 30-40 hotels , hostels and apartments and and to get a good commissions from them ?

It's difficult to do the math without exact numbers.

E.g.,
$15 units at 10% commission is $1.50. If you sell 10 units per day you make $10.50. If you sell 30 units per day you make $45.
$50 units at 15% commission is $7.50. If you sell 10 units per day you make $75.

It's difficult to succeed with online travel commission because competition is high. I wouldn't drop an existing business to move to an online commission-based business unless you know a lot about it already. It might take 1 to 2 years to get an online business up and running, even to a minimal level.

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Peter

15 years

Yes , but the money which comissioner makes its a pure profit , he does not pay for the rent , electricy , heating , water , staff , cleaning and so on.
He does not have 6 months of dead season.
Well , in some areas there is a big competition but in some areas , many hotels and apartment owners do not know what the internet is.
Not long time ago , I visited very nice small budget hotel , may be a 3 stars rooms level , though he has only one star , the hotel has 18 rooms.
During my conversation with owner , I asked him ; - what is your email ?
He said , I do not have email , I have telefone.
So , I can give you my telefone.
Yes , he said , his children have email , but I was surprised that people who have so nice property , do not pay attention to internet advertisement and do not know what internet is .
They use primitive and traditional ways of renting their rooms , and there are a lot of similar apartment owners as well.
So in some areas, I think there is a demand for the runners and booking agents.

Of course this intermediary service has some negative elements.

In some areas the tour operators , join to some hotel or hostel booking organization and force the society to believe that they are the only ''licenced'' , ''accredited'' and ''legal'' booking agencies , and if you do not join them , you will not survive as a hostel or hotel .
And there are a lot of ( excuse me ) fools , especially I think in ex-communists countries , who do not move their brains even a little , and indeed believe that in this time of crisis , they can not survive without this ''acredited '' intermediary web sites , who in reality just parasitical intermediaries from another more bigger web sites.
Some of them ask 20-30-50 % comissions from the fools , who are unable to think for themselves.
Some of them even force the ignorant authorities to believe that they have monopoly for the functioning and existance ...lets say - of all hostels in the country .
I even was a witnesser , when one guy , who a few years ago , found out what the word ''hostel '' means , and today he is a pretendor of '' the only accredited and legal hostel association ''... he was playing a role of big boss-hostel-inspector , and was very angry at the hotel owner who did not call taxi for him.
In my opinion , its appaulling parasitism when , the tour operator ask from some one 30- 50 % comissions just for registering him at some web sites and sending him the people.

Thats what I mean , that there are societies , which are very developed and there are the ones who are 20-30 years back from civilization.
In some societies even squorters rent their illegal apartments online using a good web sites , but in some some , very good and high class hotels do not know what the internet is.

But , why do you think to be the hostel owner and to develope ''your own hostel'' is more prefferable than to invest to the booking agents activity ?

Is this also because to be a good booking agent you need to spend a few years for this ?

As a small hostel owner , I see a lot of benefits from having the hostel.
1 ) It seems that you are like a traveller around the world , because all world comes to you.
2 ) you get a kind of philosopher , because you communicate with so many different people , actually many of these people are very creative and interesting personalities.
3 ) you never feel bored , or lonely if you are young or old , because your activity is so alive and so social.
4 ) you bring some benefit and contribution to the country and city where you run the hostel.
5 ) you make another people happy and gratefull for a good hospitality service , which often unforgettable .
And many many other factors , which makes the hostels running unique.
( most of all I hate in a hostels running , when the house owner comes to you once in four weeks and ask money for rent , at the time when your month was so bad :D)
So , indeed there are these factors which in its nature can not compare the hostel running with any other activities , but still , I probably see the need for another market as well - the hotel/hostel booking agent activity ...
Of course , its just in my area , but investing your energy to one activity , you at the same time can neglect your another activity.
So , I am thinking whether its worthy to have this extra business.

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