RUNNING A HOSTEL
Thanks to Eric H for this freaky picture.
Background: I've stayed in hostels and hotels every night for the last three years. I've worked at two different hostels in the Republic of Georgia for a total time of approximately nine months during that time. Through living at, running and talking to people with a lot more experience at running hostels, I've picked up a few things to share with you.
Few people wake up one day and say "I'd like to go to some foreign country and own a hostel!"
To many however, this lifestyle is more attractive than sitting in a cubical doing meaningless work for people you despise with coworkers you'd gladly set on fire in a job you learn to loathe...for years. (Can you tell I didn't like my job? I should probably let that resentment go.)
Hostel ownership is one of the few businesses you can get back your entire investment in less than one year while being provided with lodging. In other words, it's both your money maker and your house.
You get to live in a foreign country. Perhaps the love of your life lives there, you want to immerse yourself in a foreign language or just want a different life. Done correctly, it can be lucrative.
The downsides are also numerous. Hostels are usually more of a 'gray' business. The rules vary country to country and you may have to do 'tricksy' things to not only own a business but keep your visa current.
The rules of owning a business can change after months as well. This is different in every country. Do research to find out what you can and can't get away with.
Always promptly pay your taxes. Even if the country/government/current dictator decides they don't like your business, your chances of getting into trouble lessen considerably if the government is getting its cut.
Additionally, a hostel will probably convince you never to have children. Every week you get to deal with some entitled child whose parents are grateful to fund their vacation just to get rid of him or her.
Hostels are a purely temporary set up. Changes in laws, revolution and such may force you out unexpectedly. You will always rent - never own - your building. Fortunately, if you run the hostel successfully for a couple years you will have the ability to easily pick up, move and start again elsewhere - even if you leave everything behind.
Those are the upsides and the downsides of owning a hostel. Should you decide the upsides are worth it then here are the eight major things successful owners concentrate on.
1. CLEANLINESS
As the best hostel owner I've ever met says, "Clean, clean, clean. And when you are done cleaning, clean again."
If you don't like cleaning, don't open a hostel. You will either have to clean yourself or hire a cleaner. Probably both. Although most hostels post signs like 'your mother doesn't work here, clean up after yourself', many of the entitled immature children that pass through simply don't. So you end up cleaning up after them.
Once or twice a week, you will need someone to come through and give the place a determined 'deep cleaning'. Chances are this will be a local who gets paid decently according to the local rate. While this isn't much to 'western eyes', it still cuts into your profit. The work ethic of many people from other countries is very different. Cutting out personal calls, visiting with the guests, why they're not allowed to have family and friends over to visit and such take time to instill in them. Sometimes they just fail to show up for work. The old saying 'good help is hard to find' is often doubly so outside of the westernized countries. This may give an insight as to why their countries' economic state is the way it is.
2. BEDDING
Clean sheets, comfortable beds and good pillows are critical. People show up to a hostel primarily to have a place to sleep. If the bed is uncomfortable or in the shape of a banana, they won't spend much time there and will spread the word.
The sheets and pillowcases do not need to match. If there are 'wear holes' (holes made by too much friction or use) or stains, throw out these sheets immediately. Even if recently laundered, they will get the 'yuck' reaction and you get another bad review.
Become an expert on bedbugs. A review mentioning them can cripple your operation for an entire season. The best hostel owner I know can (and has) lectured me for twenty minutes on the lives and habits of the bedbug. He owns the caustic (illegal in many countries) chemicals which alone can get rid of them. Covering the beds in plastic does nothing. Know and destroy your enemy before they can destroy you. Sadly, the same cannot be said about the infested dirty hippies.
Most hostel owners attempt to cram too many beds per room in order to maximize profits. This causes the place to be very cramped with people's possessions scattered all over. When new guests come to see this, they will find somewhere else.
The minimum number of beds to start with, I'm told, is ten plus a private room. In addition, you'll need places for the staff to sleep. If it is a stained mattress on the floor, this will give all newcomers quite an initial impression of your place.
Having a keypad electronic lock on the front door allows for drunken guests to let themselves back in at three AM without the need to continually get up. Other places have a lock down time (where people are either locked in or out) though this tends to make them less popular. Still other places have some unfortunate locals who sleep on mattresses near the door to let people in and out.
If the person running the hostel is required to get up every time someone wants in or out, they will get burned out very quickly and begin to passionately hate the guests.
Short of a full time door guard, the electronic lock is the best solution I've seen thus far. Law in many countries is illusory or less. Being able to regulate who enters the building is a big deal.
3. WIFI
Get the best WiFi available. This is the major source of travelers' entertainment and research. Bandwidth using Skype calls from those who can't bear to be away from home for more than a day but for some reason are abound. Bad bandwidth means the guest will be using it to tell other people how crappy your internet is.
Because some owners are so anxious to save money, some even turn off the internet at midnight to save a few precious pennies. Tourists keep strange and varied hours.
4. SHOWERS AND TOILETS
The ratio of showers and toilets to beds is ten beds per. If you have say fifteen beds and less than two showers and two toilets this will create waiting, lines and resentment. Again, these should always be spotless.
5. LOCAL KNOWLEDGE
Everyone on staff needs to have decent local knowledge. In addition to knowing where all of the nearby bars, restaurants, attractions and stores are hostel personnel need to know the traveler routes. These are the buses, trains, airplanes tourist regularly use. How long they take, how much they cost, when they leave and so on. Within a week or two the hostel owner can learn this and put up signs with this information.
For the owner, local knowledge will also include where to pay their taxes, who needs to be bribed, how to keep your visa up to date and so on.
6. KITCHEN
Having a fully equipped kitchen with lots of refrigerator space for guests is less common in Asia where the food is generally cheap. In places where food is over 5 USD per meal, having a kitchen will allow travelers to keep to their budgets by preparing their own food.
There are many hostels which attempt to make money off the guests by serving meals and not allowing the guests access to the kitchen. While they may make some money from this, generally it seems most guests eat elsewhere. Since the kitchen is not accessible to the guests, their cost per day goes up and they stay a much shorter time at the hostel.
7. LOCKERS
There are two different lines of thought on security lockers.
Large lockers capable of holding a large laptop are the absolute minimum. If these are in the common area, they are unlikely to get jimmied open. Lockers must be free though a large deposit for the key can be required. If the lockers are the 'use your own lock' variety, the owner will either have to own bolt cutters or risk having the police smash them open should they feel the need to acquire one of your dumber residents possessions.
Other nifty lockers are located directly under the bed. These have advantages and disadvantages. The advantages are you can get all of your stuff - backpack and all - into them. Less crap littering the floor unless your resident is especially messy. The disadvantage is that some drunk guy coming in at three AM will noisily rummage through his looking for more money to give to a very special stripper. Noise in the sleeping area causes bad reviews - even if you are not at fault.
Having lockers lets would be thieves know anything good will be stored in the lockers - hence possessions are much less likely to be rummaged through.
Lockers must not be able to be easily forced open or picked with a screwdriver.
8. LOCATION
This is the tricky and most costly one.
Ideally, your hostel should be in or near the 'old town', near places tourists want to go. Sure, the property five miles away is considerably cheaper but the number of people dumb enough to stay there cuts down considerably on your profits.
If your hostel is close to clubs and other noisy spots, your quiet guests will quickly abandon it. An ideal location is several blocks away from the closest club. Not only will your hostel be quieter but drunken guests will have a chance to throw up and sober up during walk home.
THINGS TO AVOID
These things will get rid of your backpacker business quickly.
People wanting to show up just to have sex at your hostel. If they are renting the private room, this is forgivable but there are a lot of skanky people who will show up and want to have sex in the dormitory. Then they get upset when other people rate or film it. If someone shows up without luggage and you let them in, you're a moron.
Renting to locals is usually a very bad idea. The more locals you have staying at the hostel, the less foreigners you will have there. Even if they aren't showing up just to have sex, they are generally much louder, messier and more irritating guests than foreigners. And that's saying something.
TO PARTY OR NOT TO PARTY...
Much can be said for the pro's and con's of a 'party hostel'. Generally, either younger owners or very broken older ones are needed to create and keep the 'party hostel' atmosphere. If you set up a bar and sell beer and play music at your hostel, you will attract a more drunken, loud crowd. Enjoy cleaning vomit off your beds?
The more closed doors between the common area and the beds, the better. Many party hostels have no doors between where people sleep and party.
Party hostels also have a tendency to get bitched at by the neighbors. This may cause the person renting you the property to cease doing it. Remember - in most countries there is no meaningful contract - it is month by month. If the landlord/lady decides you've irritated the neighbors enough, you don't get to rent that place any more. This happened to one person who bought a hostel in Crimea and had it for less than a season.
Avoid spending more money than you absolutely have to. If you can't easily make back your initial investment - including all bills, rent, etc within twelve months you have spent too much. This is why profitable hostels don't have matching sheets, towels and fancy paint jobs.
Anything 'nice' in the hostel will be either stolen or destroyed by stupid people. There were a lot of couches and chairs in the common room of an Egyptian hostel I was staying at. Yet one of the tourists chose to sit on a radiator. The radiator immediately broke off the wall. The initial tourist response was to move away from the radiator. Had not the staff witnessed it, doubtless it would have been left to be discovered later. People don't want to pay for things, even if they are at fault.
Everything in a hostel should be sturdy, functional and not worth stealing.
Although some people think a TV/DVD/music player is necessary, often these are co-opted by the native staff. Few things are as irritating as a TV on a foreign channel - especially when you suspect the person who set the volume is at least partially deaf. And interested in having you join that team. Hostels without television have a higher chance of the guests actually interacting. Which would be a better memory of the trip - making new friends or watching The Goonies yet again? As a hostel owner, it is in your interest to have people make friends rather than stare zombie like at the television - it gives your hostel better reviews.
Every backpacker coming through will need to do laundry. Since you've probably got a laundry machine to do your sheets, offering a washing service for their clothing makes sense and brings in a bit of extra revenue. Not offering it means they do their clothing in your sinks and hang it up all over the hostel.
SETTING A PRICE
When deciding the price per bed figure out if you want to compete on price or quality. Both is a losing battle - quality costs more. The question to ask yourself is do you want to attract the kind of crowd that wants to save a euro per night?
The magic question for most people is 'how much to get started in the hostel business?' This varies widely depending on location but at a general guess, if you're starting from scratch you'll probably need about $2000 for the initial stuff (beds, sheets, some fixing of stuff, pots, etc) and first and last months rent at a minimum. Often, you can find 'turn key' hostels for sale for two or three times that.
For Americans who statistically don't know what a 'savings account' is, that's a lot - but cheaper businesses are hard to find.
LAST NOTE
Hostels live and die on reviews and word of mouth. If you don't have positive reviews on such sites as Hostelbookers and Hostelworld, you aren't in business.
Special thanks to Nichole U and Jim G for editing and 'Evil Cat' for giving me a lot of insider information. Thank you.
ON UKRAINE
From Evil Cat:
The point would be better illustrated asking why Poland was so successful at transiting (socially and economically) to EU membership from being a Soviet satellite state....That the homogeneity of the population helps explains Poland's rise that does not mean that the heterogeneity of the Ukrainian population alone explains Ukraine's marked lack of progress.....there are many contributing factors...a lack of rule of law and thus no respect for the law whenever there is an attempt to apply it....endemic corruption....nostalgia for the Soviet Union amongst retirees and ex military servicemen...a distinct lack of civil society engendering an absence of polite public discourse....a hollow and uneven capitalist economy which encourages a jarring 'me-first' selfishness....and a religious environment where 4 extremely reactionary conservative churches compete to criticize and reject Enlightenment thinking, modernity, and western liberal democratic values......These are the reasons why Ukraine is (to use the technical academic term)....fucked.
VIDEOS
TIU Front Page Hostel
Now the corrections from the owner of the hostel: 1) I am not in the Republic of Georgia - I am in Ukraine. Shows that I've been in enough countries that I no longer know where I am. 2) It is a lending book library. 3) The reason the bathroom upstairs is wood paneled is that it use to be a sauna.
This Is Russia Bitch
Friend of mine in Ukraine sent this to me. I highly recommend watching the whole damn thing.
Background: I've stayed in hostels and hotels every night for the last three years. I've worked at two different hostels in the Republic of Georgia for a total time of approximately nine months during that time. Through living at, running and talking to people with a lot more experience at running hostels, I've picked up a few things to share with you.
Few people wake up one day and say "I'd like to go to some foreign country and own a hostel!"
To many however, this lifestyle is more attractive than sitting in a cubical doing meaningless work for people you despise with coworkers you'd gladly set on fire in a job you learn to loathe...for years. (Can you tell I didn't like my job? I should probably let that resentment go.)
Hostel ownership is one of the few businesses you can get back your entire investment in less than one year while being provided with lodging. In other words, it's both your money maker and your house.
You get to live in a foreign country. Perhaps the love of your life lives there, you want to immerse yourself in a foreign language or just want a different life. Done correctly, it can be lucrative.
The downsides are also numerous. Hostels are usually more of a 'gray' business. The rules vary country to country and you may have to do 'tricksy' things to not only own a business but keep your visa current.
The rules of owning a business can change after months as well. This is different in every country. Do research to find out what you can and can't get away with.
Always promptly pay your taxes. Even if the country/government/current dictator decides they don't like your business, your chances of getting into trouble lessen considerably if the government is getting its cut.
Additionally, a hostel will probably convince you never to have children. Every week you get to deal with some entitled child whose parents are grateful to fund their vacation just to get rid of him or her.
Hostels are a purely temporary set up. Changes in laws, revolution and such may force you out unexpectedly. You will always rent - never own - your building. Fortunately, if you run the hostel successfully for a couple years you will have the ability to easily pick up, move and start again elsewhere - even if you leave everything behind.
Those are the upsides and the downsides of owning a hostel. Should you decide the upsides are worth it then here are the eight major things successful owners concentrate on.
1. CLEANLINESS
As the best hostel owner I've ever met says, "Clean, clean, clean. And when you are done cleaning, clean again."
If you don't like cleaning, don't open a hostel. You will either have to clean yourself or hire a cleaner. Probably both. Although most hostels post signs like 'your mother doesn't work here, clean up after yourself', many of the entitled immature children that pass through simply don't. So you end up cleaning up after them.
Once or twice a week, you will need someone to come through and give the place a determined 'deep cleaning'. Chances are this will be a local who gets paid decently according to the local rate. While this isn't much to 'western eyes', it still cuts into your profit. The work ethic of many people from other countries is very different. Cutting out personal calls, visiting with the guests, why they're not allowed to have family and friends over to visit and such take time to instill in them. Sometimes they just fail to show up for work. The old saying 'good help is hard to find' is often doubly so outside of the westernized countries. This may give an insight as to why their countries' economic state is the way it is.
2. BEDDING
Clean sheets, comfortable beds and good pillows are critical. People show up to a hostel primarily to have a place to sleep. If the bed is uncomfortable or in the shape of a banana, they won't spend much time there and will spread the word.
The sheets and pillowcases do not need to match. If there are 'wear holes' (holes made by too much friction or use) or stains, throw out these sheets immediately. Even if recently laundered, they will get the 'yuck' reaction and you get another bad review.
Become an expert on bedbugs. A review mentioning them can cripple your operation for an entire season. The best hostel owner I know can (and has) lectured me for twenty minutes on the lives and habits of the bedbug. He owns the caustic (illegal in many countries) chemicals which alone can get rid of them. Covering the beds in plastic does nothing. Know and destroy your enemy before they can destroy you. Sadly, the same cannot be said about the infested dirty hippies.
Most hostel owners attempt to cram too many beds per room in order to maximize profits. This causes the place to be very cramped with people's possessions scattered all over. When new guests come to see this, they will find somewhere else.
The minimum number of beds to start with, I'm told, is ten plus a private room. In addition, you'll need places for the staff to sleep. If it is a stained mattress on the floor, this will give all newcomers quite an initial impression of your place.
Having a keypad electronic lock on the front door allows for drunken guests to let themselves back in at three AM without the need to continually get up. Other places have a lock down time (where people are either locked in or out) though this tends to make them less popular. Still other places have some unfortunate locals who sleep on mattresses near the door to let people in and out.
If the person running the hostel is required to get up every time someone wants in or out, they will get burned out very quickly and begin to passionately hate the guests.
Short of a full time door guard, the electronic lock is the best solution I've seen thus far. Law in many countries is illusory or less. Being able to regulate who enters the building is a big deal.
3. WIFI
Get the best WiFi available. This is the major source of travelers' entertainment and research. Bandwidth using Skype calls from those who can't bear to be away from home for more than a day but for some reason are abound. Bad bandwidth means the guest will be using it to tell other people how crappy your internet is.
Because some owners are so anxious to save money, some even turn off the internet at midnight to save a few precious pennies. Tourists keep strange and varied hours.
4. SHOWERS AND TOILETS
The ratio of showers and toilets to beds is ten beds per. If you have say fifteen beds and less than two showers and two toilets this will create waiting, lines and resentment. Again, these should always be spotless.
5. LOCAL KNOWLEDGE
Everyone on staff needs to have decent local knowledge. In addition to knowing where all of the nearby bars, restaurants, attractions and stores are hostel personnel need to know the traveler routes. These are the buses, trains, airplanes tourist regularly use. How long they take, how much they cost, when they leave and so on. Within a week or two the hostel owner can learn this and put up signs with this information.
For the owner, local knowledge will also include where to pay their taxes, who needs to be bribed, how to keep your visa up to date and so on.
6. KITCHEN
Having a fully equipped kitchen with lots of refrigerator space for guests is less common in Asia where the food is generally cheap. In places where food is over 5 USD per meal, having a kitchen will allow travelers to keep to their budgets by preparing their own food.
There are many hostels which attempt to make money off the guests by serving meals and not allowing the guests access to the kitchen. While they may make some money from this, generally it seems most guests eat elsewhere. Since the kitchen is not accessible to the guests, their cost per day goes up and they stay a much shorter time at the hostel.
7. LOCKERS
There are two different lines of thought on security lockers.
Large lockers capable of holding a large laptop are the absolute minimum. If these are in the common area, they are unlikely to get jimmied open. Lockers must be free though a large deposit for the key can be required. If the lockers are the 'use your own lock' variety, the owner will either have to own bolt cutters or risk having the police smash them open should they feel the need to acquire one of your dumber residents possessions.
Other nifty lockers are located directly under the bed. These have advantages and disadvantages. The advantages are you can get all of your stuff - backpack and all - into them. Less crap littering the floor unless your resident is especially messy. The disadvantage is that some drunk guy coming in at three AM will noisily rummage through his looking for more money to give to a very special stripper. Noise in the sleeping area causes bad reviews - even if you are not at fault.
Having lockers lets would be thieves know anything good will be stored in the lockers - hence possessions are much less likely to be rummaged through.
Lockers must not be able to be easily forced open or picked with a screwdriver.
8. LOCATION
This is the tricky and most costly one.
Ideally, your hostel should be in or near the 'old town', near places tourists want to go. Sure, the property five miles away is considerably cheaper but the number of people dumb enough to stay there cuts down considerably on your profits.
If your hostel is close to clubs and other noisy spots, your quiet guests will quickly abandon it. An ideal location is several blocks away from the closest club. Not only will your hostel be quieter but drunken guests will have a chance to throw up and sober up during walk home.
THINGS TO AVOID
These things will get rid of your backpacker business quickly.
People wanting to show up just to have sex at your hostel. If they are renting the private room, this is forgivable but there are a lot of skanky people who will show up and want to have sex in the dormitory. Then they get upset when other people rate or film it. If someone shows up without luggage and you let them in, you're a moron.
TO PARTY OR NOT TO PARTY...
The more closed doors between the common area and the beds, the better. Many party hostels have no doors between where people sleep and party.
Party hostels also have a tendency to get bitched at by the neighbors. This may cause the person renting you the property to cease doing it. Remember - in most countries there is no meaningful contract - it is month by month. If the landlord/lady decides you've irritated the neighbors enough, you don't get to rent that place any more. This happened to one person who bought a hostel in Crimea and had it for less than a season.
Avoid spending more money than you absolutely have to. If you can't easily make back your initial investment - including all bills, rent, etc within twelve months you have spent too much. This is why profitable hostels don't have matching sheets, towels and fancy paint jobs.
Anything 'nice' in the hostel will be either stolen or destroyed by stupid people. There were a lot of couches and chairs in the common room of an Egyptian hostel I was staying at. Yet one of the tourists chose to sit on a radiator. The radiator immediately broke off the wall. The initial tourist response was to move away from the radiator. Had not the staff witnessed it, doubtless it would have been left to be discovered later. People don't want to pay for things, even if they are at fault.
Although some people think a TV/DVD/music player is necessary, often these are co-opted by the native staff. Few things are as irritating as a TV on a foreign channel - especially when you suspect the person who set the volume is at least partially deaf. And interested in having you join that team. Hostels without television have a higher chance of the guests actually interacting. Which would be a better memory of the trip - making new friends or watching The Goonies yet again? As a hostel owner, it is in your interest to have people make friends rather than stare zombie like at the television - it gives your hostel better reviews.
Every backpacker coming through will need to do laundry. Since you've probably got a laundry machine to do your sheets, offering a washing service for their clothing makes sense and brings in a bit of extra revenue. Not offering it means they do their clothing in your sinks and hang it up all over the hostel.
SETTING A PRICE
When deciding the price per bed figure out if you want to compete on price or quality. Both is a losing battle - quality costs more. The question to ask yourself is do you want to attract the kind of crowd that wants to save a euro per night?
The magic question for most people is 'how much to get started in the hostel business?' This varies widely depending on location but at a general guess, if you're starting from scratch you'll probably need about $2000 for the initial stuff (beds, sheets, some fixing of stuff, pots, etc) and first and last months rent at a minimum. Often, you can find 'turn key' hostels for sale for two or three times that.
For Americans who statistically don't know what a 'savings account' is, that's a lot - but cheaper businesses are hard to find.
LAST NOTE
Hostels live and die on reviews and word of mouth. If you don't have positive reviews on such sites as Hostelbookers and Hostelworld, you aren't in business.
Special thanks to Nichole U and Jim G for editing and 'Evil Cat' for giving me a lot of insider information. Thank you.
ON UKRAINE
From Evil Cat:
The point would be better illustrated asking why Poland was so successful at transiting (socially and economically) to EU membership from being a Soviet satellite state....That the homogeneity of the population helps explains Poland's rise that does not mean that the heterogeneity of the Ukrainian population alone explains Ukraine's marked lack of progress.....there are many contributing factors...a lack of rule of law and thus no respect for the law whenever there is an attempt to apply it....endemic corruption....nostalgia for the Soviet Union amongst retirees and ex military servicemen...a distinct lack of civil society engendering an absence of polite public discourse....a hollow and uneven capitalist economy which encourages a jarring 'me-first' selfishness....and a religious environment where 4 extremely reactionary conservative churches compete to criticize and reject Enlightenment thinking, modernity, and western liberal democratic values......These are the reasons why Ukraine is (to use the technical academic term)....fucked.
VIDEOS
TIU Front Page Hostel
Now the corrections from the owner of the hostel: 1) I am not in the Republic of Georgia - I am in Ukraine. Shows that I've been in enough countries that I no longer know where I am. 2) It is a lending book library. 3) The reason the bathroom upstairs is wood paneled is that it use to be a sauna.
This Is Russia Bitch
Friend of mine in Ukraine sent this to me. I highly recommend watching the whole damn thing.
Awesome! Good luck!
ReplyDelete