This month’s Member Spotlight is on Adam Newman and his truly unique hostel, Favela Experience. Many of us come into the industry with some level of altruism. Adam didn’t just take this to heart, he ran with it, to the tune of 40% profits going back to the local community. His hostel in Rio de Janeiro is located in a favela. What many outsiders see as a low-income slum, Adam and his team saw what the locals did: a place full of community, culture, and peace. The journey of what they have created is pretty incredible to read, and extremely inspiring. Below is his account of why they are doing this, how they are able to, and what they’ve learned along the way. Be sure to check out the video at the end as well. Thank you, Adam, for sharing your story!
What drew you to the hostel industry, and why did you decide to open your own?
As an avid backpacker and cultural enthusiast, I have always been a huge fan of hostels. Their unique ability to bring together people from all over the world in one common place is inspiring and magical. Every hostel is just bustling with many time unharnessed cultural collaboration potential that when connected to the local community in the right way, amazing things happen.This personal passion and admiration for hostels and the potential to ultimately drive positive social impact and intercultural exchange are what led me to decide to open a hostel.
Tell us about the Favela Experience (FAVEX). What gives it its magic?
The Favela Experience magic doesn’t come solely from the space itself but from the collective energy of the surrounding community. Our hostel has gone through a very organic growth and improvement process where through the influence, support and creativity of many people from around the world and throughout the local community we have created a truly unique environment. The hostel is surrounded by a loving and friendly community paired with panoramic ocean views and close proximity to the Tijuca forest and Dois Irmãos mountains, it’s a one of a kind combination!
FAVEX has a fairly unusual business model. What inspired you to take this approach?
Our business model came from an inherent desire to understand the crossroads at which a profit driven business with a social impact vision could function in a holistic and mutually beneficial way. In addition, our lack of personal funds to begin the hostel required us to find creative ways to begin the business so starting the hostel within the underdeveloped space of a local NGO with the goal of creating a sustainable income stream for both the NGO and our business was the best path for all.
Many new hostels struggle financially without giving away any profits. How are you able to give 40% back to the community?
When we originally began the business we didn’t have any personal money or investment to get things off the ground, so we couldn’t afford to pay rent on a property. Our space at the time was in bad shape, in desperate need of some TLC, and was providing little to no benefit to the NGO. Therefore, we developed a model that allowed us to create a business while progressively providing increasing amounts of revenue to the NGO to help keep the doors open. Additionally, as foreigners developing a business in a favela community, we saw it as an essential investment to contribute back to the community in a socially responsible manner.
What has been the community reaction to FAVEX? Do you ever get accused of ‘voluntourism’ or profiting off other’s poverty?
As a whole, the community’s reaction has been overwhelmingly positive. The community of Vidigal is amazing and our neighbors, partners, employees, etc. are what make life here so amazing. Our friendships and mutual respect for each other is at the heart of what makes doing business here even possible. I think there are always people who do not truly understand what you are doing or your motives, and who may jump too quickly to conclusions about your motives. However, I try to not pay too much attention to that and instead focus on responsible reputation, management, and community engagement.
What was your biggest challenge in starting a hostel?
The biggest challenge in starting and running a hostel is sustaining demand and cash flow. As a poorly funded startup business, in a city with nearly 2,000 hostels, it can be very difficult to differentiate yourself and reach a wide enough audience to guarantee a sustainable revenue stream. One month everything may be fantastic and the next you're at risk of closing down.
What was your biggest challenge specifically in opening a hostel with an emphasis on bringing proceeds back into the community?
The biggest challenge in that respect are the terrible stereotypes that people have about favela communities. Both people in Rio and throughout the world have a purely negative perspective on favelas, so it requires a significant amount of education and explanation in order to convince people that it is safe enough for them to come here. This is primarily facilitated by the mainstream media and local Rio residents with strong opinions about places they often hardly know.
How long has FAVEX been open? Has it grown or expanded since opening?
Favela Experience was originally founded in 2013 as a homestay network in Rocinha. The current FAVEX Vidigal hostel officially opened its doors for business in December of 2014.
What was some great advice you were given that is proving true?
The best advice I’ve received is to be conscious of the fact that most of the time things take twice as long, cost twice as much and generate half as much profit as you think they will, so plan accordingly, be persistent and be patient.
What advice would you have for other hostels who are interested in doing something similar to FAVEX?
My advice is to do your homework and take your time. Spend as much time in the community as possible having a drink on the corner with local regulars, eat lunch in in-home eateries, ask questions, lots of them, and listen intently. Most of the time you are going into a community where people are severely misunderstood and have confronted very difficult and complicated realities. The more you can truly empathize and understand the community, the easier it will be to develop a successful and sustainable business.
What about hostels who appreciate the sentiment but don’t have that business model. Are there still meaningful ways to engage with your community?
In my opinion, every single business on the planet has the potential and the responsibility to engage with its community. As a business that receives people from all over the world and is trusted to provide relevant and insider tips on local travel, you have a great amount of responsibility and power. Channel that responsibility into positive impact by engaging with local changemakers, social projects, spaces, and experiences, and look at how you could be supporting them with mutually beneficial partnerships.
What were you (or your team) doing professionally before opening FAVEX? What previous lessons have you brought to this project?
Before running Favela Experience, I co-founded a small bed and breakfast in the Rio neighborhood of Santa Teresa, called the Rio Palazzo. FAVEX co-founder and operation manager Rodrigo Viera had recently moved here from Uruguay where he worked as the maintenance director for the Hospital Britanico in Montevideo. Both of us brought with us a very strong work ethic and overall strong dedication to success through patience and perseverance.
Of all the hats a hostel operator has to wear, which ones do you find the most challenging? The most rewarding?
All the roles within the hostel have their unique challenges. I don’t think one of them is necessarily more difficult than the other, but more so the collective responsibility of having to balance all of the logistics each one brings. You have to be able to quickly and efficiently focus and connect to the goal of the work at hand. One minute you’re crunching financials, then cleaning a toilet, the next you’re showing a guest what to do in the city and at night you’re in a suit at a networking event. It’s a crazy lifestyle but extremely gratifying and rewarding.
How has HostelManagement.com been useful for you? What would you like to see in the future?
Hostel Management has been an absolutely essential tool for me in my journey to Rio. From my first 3 months in Rio when I went through the forums and found a hostel in Santa Teresa that I eventually worked at to learn the tricks of the trade. To nowadays reading about other people’s experiences and tips in order to further improve my business. HM provides an online community of people who can identify and assist with navigating the complexities of running a hostel business.
In the future, I think it would be really great to see how Hostel Management could do more to foster the development of in-person relationships and collaborations between hostel owners, communities, investors, employees and communities around the world in order to stimulate the development of additional sustainable and responsible tourism and hospitality businesses.
Thanks again to Adam & the entire FAVEX crew for sharing their story and for all that they do. Be sure to check out more info here:
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