How to Start a Backpackers Hostelby Jason Noronha on April 8th, 2012
Having quit my job to start a backpackers hostel (check it out and give us a like), let me tell you that getting into the backpacking business is less glamorous than what it appears. However, a job is only as fun as you allow it to be. You’re the boss and your job involves hanging out with interesting people on holiday. Life is a holiday (except when the toilet’s broken).
Let me break down this process to give you a glimpse into what goes into the making of a backpackers hostel..
1. Take the plunge
There isn’t a bachelors of backpacking (yet) and starting a backpackers hostel requires no eduction. In fact it requires no specific skill but once you’re done you will be a jack of all trades. A pinch of common sense should guide you well enough along this journey. Don’t sit on the fence with this decision. Life will pass you by. If you’re looking to start a backpackers hostel, nobody but you will be able to say whether its the right or wrong thing to do. Trust your instinct and do what you think will make you happy. Do it now. Don’t wait for tomorrow.
2. Hang with the hippies
Great. So you’ve decided to start a hostel. Now comes the question of where. This may come as a rude shock to you but your choice of location is the biggest factor that could make or break your business. If your stretch of beach isn’t popular, having the swankiest backpacker hostel will not bail you out of that hole. Don’t rush this decision. Try and backpack through your chosen destination first to see the World through the eyes of a backpacker. And while you’re backpacking through town, talk to as many people as you can. By the end of this exercise you’ll need to know who visits, from where, for how long and why. If you find sitting by the beach with a beer and chatting with fellow backpackers hard work, you might need to rethink this choice of profession.
3a. Find your dream house
Next comes selecting a house that will hold up against an army of rowdy backpackers. Taking 2 steps back, the purpose of your place is to enable backpackers to meet each other. A fundamental draw for backpackers is that your place will have to be affordable. As for enabling backpackers to meet, a common room is of paramount importance. While viewing possible houses bear in mind tiny details such as number of beds you can fit into the house without asking more than 8 people to share a bathroom (the biggest limiting factor). Although not obvious from the offset, your relationship with your landlord will be incredibly important too. Ensure that your landlord knows exactly what you plan to do with the house. As far as buying a house goes, remember that you’re in the backpacker business and not real estate. Limit your risk and stick with renting.
3b. Be the man with a plan
This step is to be executed at the same time as the previous step. Whether you like it or not, you will need a business plan. Plug the house rent, estimated operational expenses (electricity, internet, cleaner, etc), price per bed per night and your plan should give you the occupancy required for you to cover your expenses. Is this a reasonable number? From experience, try and ensure that you can cover all your expenses with an occupancy of around 30%. If that’s not possible,either your house rent is too high or your beds are too cheap. Fortunately you won’t have to reinvent the wheel and you can just use somebody else’s excel genius to figure out the finances.
4. Shop till you drop
Once you’ve signed the house lease, you’re 60% there. The rest is the easy part. It’s time to get busy and start shopping. Bunk beds, lockers, rugs, curtains, mattresses, blah blah blah. The shopping list will drag into the hundreds and you’ll be ready to give up at numerous stages but you’ll have to soldier through it (maybe its because there’s no love lost between me and shopping).
5. Paint the walls red
Finally comes the most exciting part of the entire process – setting up the hostel. Seeing all your ideas come to life is incredibly satisfying. However, do remember that every day spent setting up the hostel is an expense because you’ll be paying rent and not earning any money. Get operational as soon as possible and tweak things as you go.
Building a reading corner
Branding, painting, etc
Somewhere to sleep
And if you’ve gotten this far, here’s why you should think twice before opening a backpackers hostel.
(photo credit to Amber, my partner in hostel crime)