A Small-Size Hostel (14-20 dorm beds) Viable?

There are a lot of factors that will determine if your setup would be viable. 14-20 beds could certainly work under the right conditions. (Personally, I would LOVE to run a 20-bed hostel!)

• Will you hire employees, or will you run the hostel yourself? How much will you pay your staff? How much will you have to pay in taxes on top of their salaries? Are you required by law to have the reception open 24 hours per day?
• Do you have to make rent/mortgage payments, or do you own the building outright?
• How much can you charge for a bed (based on the competition) and is there enough demand to fill those beds?
• Do you have enough money to invest up front to get the property into hostel-ready condition? (beds, bathrooms, sheets, furniture, kitchen appliances, etc.)? How soon do you want to make that money back?
• Do you want to turn a big profit, or are you doing this as a lifestyle choice?

Start by answering these questions for yourself and it should give you some idea of whether your hostel would be viable or not. You certainly don’t need to give us specific numbers, but I’m curious to hear if these calculations work out in your favor or not.

+ It's a small hostel, so I guess I can run it myself as my friend used to do (I mean I wanna run it with a partner but so far I haven’t find one, aren't you interested Rocksack Brian, by the way?!) - of course I'll get help with cleanliness (twice or three times a week) and high season with one more receptionist (internship for 3 months). I'm not required by law to have 24 hours reception, but I'll be there for my guest if they need (I'll live there at least the first years)

That’s an incredibly tempting prospect:) It will definitely be easier on you when there is someone else to share the responsibilities and the workload. Running a one-man-show for years on end would be extremely exhausting.

Are you thinking about expanding the hostel after the first couple years?

+ There are two more hostels at the city and it has really bad reviews on internet (staff and cleanliness), their fees are very good I hardly will be able to make it less expensive - and to keep my turnover at the safe point, I can rent the rooms for foreigner exchange students (there is a great university at the area and a lot of demand for a good place to stay - 9 of them can save my finances with a small profit).

If the competition has really bad reviews and you have good reviews, then you shouldn’t try to be less expensive than they are. Let them be the cheap ones, and you can be the quality option in the city. Your guests will probably be a lot more enjoyable than theirs!

It’s good that your friend has already been running the hostel for a while so you can get an accurate idea of the demand. Based on her records, do you think that you would reach an average of 9 travelers per night if you didn’t rent rooms to foreign exchange students? (A common sentiment on this forum is that long term guests can become unpleasant company in a hostel, even if they start out super nice) As a backup plan in a worst case scenario, you could convert the hostel into a boarding house for those students and still make a profit. It wouldn’t be as much fun though.;)

What else I have to know before to make the deal?? I have to say YES or NO on May!!

• Find out how successful the hostel has been up until now. Does it make enough money to cover the operational costs, and is it currently making a profit?
• Get your friend to tell you about the good, the bad, and the ugly in the hostel. What works really well, and what problems are common or expected to come up? What are the most frequent complaints? Are there any issues with the plumbing, electricity, flawed construction, etc? What are the things that she hates, and what are the things that she loves about that hostel? (you will probably love and hate them too)
• Does the hostel have any additional debt that you will become responsible for paying?
• Are there periods when it sits empty, and if so, how long do they last?
• If the hostel continues to perform at the same level for you that it has for your friend, are you comfortable with the financial situation that you will be in?
• Are there any problems with the neighbors or anyone else that you will inherit and have to deal with?
• Are all of the papers, licenses, inspections, etc. up to date?

Above all, you need to be really motivated to make this happen. Before you sign anything, ask yourself if you are prepared to eat, sleep, and breathe your hostel. If you’re going to run the business primarily on your own, then you will have to be. It will become your baby and you will dedicate yourself to it full time. Are you ready for that? Does that make you excited? (For what it’s worth, I’m excited for you!!)

I don't know if this helps you, marips, but I used to work in a 50 bed hostel that only employed 2 receptionists and made up the cleaning crew of 'volunteer' guests.

4 hours work = 1 free night and free breakfast.

Cleaning toilets and making beds is hardly a science, and the potential numbers of cleaners increase and decrease with seasonal flux.
I don't know about the laws regarding this where you are in the world, but it may be worth looking into.

Advantages: No contracts or taxable costs, No staff rooms required

Disadvantages: The whole process is somewhat unreliable.

Hi Rita,

If you want quiet people who are interested in culture, gastronomy and personal contact you can make an attempt to target them specifically. Here are some suggestions for getting the guests you want.

If you do run a small quiet place, you could probably leave the backpackers alone without causing any problems. Are they likely to go out on the town at night, or is it the kind of city where everyone stays home? You can always give them something to do like play a board game or start a deep discussion, or simply let them sleep. There are plenty of places that do not offer 24-hour reception.

Will you sleep on-site? If you do, then they can always wake you up if they need something urgently in the middle of the night. If you won’t sleep at the hostel, then it might not be a bad idea to hire someone or let someone stay for free in exchange for being on-call at night. With 12 beds it seems like a shame to give one of them away, but it might be cheaper than hiring someone.