What make A Hostel most wanted and high occupied?

• The level of comfort in your rooms and common spaces is very important. Be sure to invest in good beds and mattresses.  
• Reliable and fast wi-fi is going to be critical for your guests.
• Your specific decorations aren’t the most important thing in the world, but a lack of decorations will feel sterile and devoid of character.  
• Thorough staff training will pay off tremendously, both for guest satisfaction and for team management.
• Anything you can do to build a community among your team and among your guests will have a huge impact on the success of your hostel

Hey Benjamin,

I stay in both large and small hostels, depending on the objective of my trip.  

When traveling for fun (backpacking) I always stay in small hostels.  I want to take advantage of the social vibe and be a part of the community.  

When I travel for business I stay in larger hostels.  I can take advantage of the social atmosphere when I want it, but I can also stay anonymous and be a bit more anti-social while I do my work without negatively influencing the hostel environment.  

There are advantages and drawbacks to both business models.  Small hostels can definitely compete with big ones in the same market.  

• They have the advantage of being more intimate and creating a community more easily, which can translate to more memorable experiences (and extended stays, work-of-mouth marketing, merchandise purchases, brand abmbassadors, etc).
• Services and recommendations can be tailored to each guest’s interests much better than a bigger hostels could, because it is more likely for the hostel team to get to know each guest.  
• The costs of starting and running a small hostel are lower than a big one.
   

I think the only paramount feature is the atmosphere. I have been to hostels that did everything by the book and provided a very average time (for example Serenada Hostel, Coimbra, P or Czech Inn, Prague, CZ) and to hostels that were a disaster on paper but managed to create a great community (see Pension Facundo, Tarifa, SP).

How to create a community and a cool atmosphere then, it is hard to tell. Every hostel has its own formula. I would say that crucial elements are:

-Nice, warm, friendly staff (Pilot Design Hostel in Porto, P).

-Nice layout and architecture of the place itself. Common spaces are crucial to bring people together (Makuto Hostel, Granada, SP for the goodness of the layout, Rocking J's, Puerto Viejo, CR for the coolness of the decos).

-Flexibility on rules (see Laneez, Ericeira, P): if rules are too many or too strict it kinda feels like jail rather than vacation.

-Cool owners who make you feel special no matter how many guests they have every year (see Distant Relatives Ecolodge and Backpackers, Kilifi, KE).

-Low prices for extra stuff. I had my stay at a very nice hostel (Lisbon Lounge Hostel, Lisbon, P) kinda ruined by them charging me 10 euros for a washing machine load (I only had like 5 t-shirts, little underwear and a pair of short trousers). It kills the mood to overcharge people.

Then there are those "chance" factors that are out of everyone's control, such as the other guests of the place at the time of your stay. In this case the ability is in being appealing to the right segment of travellers. I would not try to fill up the place no matter what you get. Better to get a bit fewer guests and avoid attracting undesired ones that end up ruining the experience to others. 

Cheers