How to Start a Backpackers Hostel: A Complete Guide

Are you considering starting your own backpackers hostel? Running a hostel can be a rewarding and exciting venture, but it also requires careful planning and preparation. From choosing a location to setting up the hostel and managing day-to-day operations, there are many important factors to consider.

In this complete guide, we’ll provide you with all the information you need to start a successful backpackers hostel. Whether you’re an experienced entrepreneur or new to the hospitality industry, this guide will help you navigate the process and create a thriving business. So, let’s get started!

Backpackers Hostel – New Trend

Backpackers hostels are a new trend in the hospitality industry that’s gaining popularity among budget-conscious travellers around the world. According to Hostelworld, the global hostel market is projected to grow by 7.6% annually over the next five years, reaching a value of $6.6 billion by 2025. This growth can be attributed to the increasing number of young travellers who are seeking affordable and authentic travel experiences.

Hotels offer travellers a unique and social atmosphere, often featuring shared dorm rooms, communal spaces, and organized activities, making them an ideal choice for those looking to connect with other like-minded travellers. With the growing demand for backpackers hostels, there has never been a better time to start your own hostel and tap into this lucrative market.

Reasons for Increasing Backpackers Hostels:

• A growing number of young and budget-conscious travellers seeking affordable travel experiences
• Increasing popularity of backpacking and adventure travel
• The desire for authentic and unique travel experiences
• Rise of social media and travel blogging, encouraging travellers to seek out off-the-beaten-path destinations and accommodations
• Increased access to information and booking options through online travel agencies and hostel booking platforms
• Growing awareness of sustainability and eco-tourism, with many backpackers hostels promoting eco-friendly practices and responsible tourism

Things to Consider Prior to Opening a Hostel

Here are some things to consider prior to opening a backpacker’s hostel business:

1. Location: Choose a location that is accessible, safe, and appealing to backpackers. Consider proximity to public transportation, popular attractions, and local amenities.
2. Target Audience: Identify the target audience for your hostel business. Make the basic travel needs that need to be covered.
3. Licensing and permits: Research and obtain any necessary licenses and permits for your hostel business. These may include business licenses, zoning permits, and health and safety certifications.
4. Budget: Create a comprehensive budget that includes startup costs, ongoing expenses, and projected revenue. Be sure to account for expenses such as rent, utilities, staffing, and marketing.
5. Amenities and services: Determine what amenities and services you will offer guests, such as free Wi-Fi, communal kitchen, laundry facilities, or tours and activities. Make sure you have the necessary resources and infrastructure to provide these services.
6. Marketing and advertising: Develop a strong marketing and advertising strategy to attract backpackers to your hostel. This may include creating a website, social media presence, and partnerships with travel agencies or online booking platforms.
7. Staffing: Determine the staffing needs for your hostel, including front desk staff, housekeeping, and maintenance personnel. Ensure that you have a clear plan for recruitment, training, and management of your staff.
8. Legal considerations: Consult with a lawyer to ensure that your hostel business is in compliance with all relevant laws and regulations, such as employment laws and liability insurance requirements.
9. Safety and security: Implement policies and procedures to ensure the safety and security of your guests, such as installing security cameras, providing lockers for valuables, and enforcing quiet hours.

How to Start a Backpackers Hostel: Step-by-Step Guide

Starting a backpackers hostel can be an exciting and rewarding venture, but it requires careful planning and preparation. Here’s a step-by-step guide to help you start your own backpacker’s hostel:

1. Conduct Market Research:

Start by researching the market demand for backpackers hostels in your desired location. This will help you understand the competition, target audience, and potential revenue.

It’s important to learn about the place where you want to open your hostel before you do so. This means knowing the local culture, customs, regulations and laws, weather patterns, and accessibility to popular attractions. This knowledge will help you run your hostel in a way that meets your guests’ needs and wants.

In addition to researching the market demand, it’s important to research your competitors. This includes analyzing their strengths, weaknesses, pricing strategies, marketing tactics, and guest reviews. This information will help you identify opportunities to differentiate your hostel and stand out in a crowded market.

Also, learning about hostel operations before starting a hostel is important because it helps you understand the market demand, competition, target audience, and potential revenue. It also enables you to establish standard operating procedures, create a positive guest experience, manage finances effectively, and develop a comprehensive business plan, which increases your chances of success.

2. Develop a Business Plan:

Develop a comprehensive business plan that includes a budget, marketing strategy, staffing plan, and operational procedures. This will serve as a roadmap for your hostel business.

Here are some examples of unique selling points (USPs) for hostels:

1. Location: Hostels located in desirable and accessible locations such as near tourist attractions, public transportation, or city centres can be a significant USP.
2. Price: Offering affordable accommodation for budget-conscious travellers can be a major USP for a hostel.
3. Atmosphere: Hostels that offer a welcoming, social and community-oriented atmosphere can be an appealing USP for guests.
4. Design: A well-designed and aesthetically pleasing hostel can be a major USP, especially for travellers who value unique and stylish accommodation.
5. Amenities: Offering unique and valuable amenities such as free breakfast, social events, laundry services, or bicycle rentals can be a significant USP.
6. Sustainability: Hostels that prioritize eco-friendly practices, such as reducing waste or using renewable energy, can be an appealing USP for environmentally-conscious travellers.
7. Safety and security: Providing a safe and secure environment for guests, including secure lockers, 24-hour front desk, and CCTV surveillance, can be a critical USP.

There are several types of rooms that can be offered in the hostel business. Here are some common options:

1. Dormitory Room: This is a shared room with multiple beds, typically between 4-20 beds in a room. Dormitory rooms are usually the most affordable option and are popular with budget-conscious travellers and backpackers.
2. Private Room: This is a room that is reserved for one group or individual, and can vary in size and amenities. Private rooms can be a more expensive option but offer more privacy and comfort.
3. Family Room: This larger private room is designed to accommodate families or groups of travellers. Family rooms may have multiple beds or bunk beds, and may also have additional amenities such as a private bathroom.
4. Capsule or Pod Room: This is a type of dormitory room that offers a more private sleeping space. Capsule or pod rooms typically have a small enclosed space with a bed, and may also have additional features such as a TV or personal storage space.
5. Mixed or Female-only Rooms: Hostels may offer dormitory rooms that are exclusively for female guests, or have mixed-gender rooms that are separated by gender. This can be a popular option for female travellers who prefer to sleep in a female-only environment.
6. Deluxe or Premium Rooms: Some hostels may offer deluxe or premium rooms that are larger, more private, and have additional amenities such as a private bathroom or balcony. These rooms are typically more expensive than standard rooms.

3. Secure Financing:

Determine your financing needs and secure financing for your hostel business, whether through personal savings, loans, or investors. Calculating your overall start-up cost is important for decision-making. Although the real expenses might differ from this estimate, it would be an approximate figure. The figure could be increased or decreased as per the present scenarios.

Later you need to calculate your hostel’s rates (minimum and maximum) for the different types of rooms that you offer. Make sure you have competitive pricing to avoid losses.

4. Choose a Suitable Location:

Choose a suitable location for your hostel, considering factors such as accessibility, safety, and proximity to popular attractions and amenities.

5. Obtain Necessary Licenses and Permits:

Obtaining any necessary licenses and permits for your hospitality business is one of the important tasks. The licenses and permits required to start a hostel may vary depending on the country, state or local laws. However, here are some common licenses and permits that may be necessary:

• Business licenses
• Building permit
• Local authority permit
• Health and safety certifications
• Fire Safety Certificate
• Rent Agreement (if the property is on lease)

6. Set up the Infrastructure:

The infrastructure set up for a hostel business is a critical aspect of ensuring a positive guest experience and efficient operations.

Here are some key elements to consider when setting up the infrastructure for your hostel:

• Sleeping Areas: The sleeping areas should be comfortable, clean and provide sufficient space for guests to sleep. This may include dormitory rooms with bunk beds, private rooms, or capsule or pod rooms. You’ll need to ensure that the sleeping areas are properly ventilated, well-lit and have sufficient power outlets.
• Common Areas: Common areas such as lounges, kitchens, dining areas, and outdoor spaces are important for creating a social atmosphere and encouraging guests to interact with one another. These areas should be designed to accommodate the number of guests you expect to host and should have comfortable seating, tables, and other amenities such as TVs or board games.
• Restrooms and Showers: Restrooms and showers should be clean, well-maintained and provide adequate privacy. You’ll need to ensure that there are enough restrooms and showers for the number of guests you expect to host and that they are easily accessible from the sleeping areas.
• Kitchen and Dining Facilities: If you plan to provide meals for guests, you’ll need to set up a fully functional kitchen with cooking appliances, refrigerators, and storage space for food and utensils. You’ll also need to provide dining facilities such as tables, chairs, and cutlery.
• Safety and Security: Safety and security are paramount in a hostel. You’ll need to install fire alarms, smoke detectors, and emergency lighting to ensure the safety of your guests. You may also need to provide CCTV cameras, secure lockers, and key card access to safeguard the premises
• Technology and Connectivity: Offering high-speed Wi-Fi access, charging stations, and other technological amenities can enhance the guest experience and attract more customers to your hostel.

7. Develop a Strong Online Presence:

Developing a strong online presence is critical for the success of hostel businesses in today’s digital age.

Here are some tips to help you develop a strong online presence for your hostel:

Build a Website:

Create a professional website that showcases your hostel’s features, amenities, pricing, location and other details. Your website should be visually appealing, easy to navigate and mobile-responsive. You may also need to invest in hostel management software, Property Management System (PMS), and Booking Engines like hotels to manage reservations, billing, and other administrative tasks.

Use Social Media:

Use social media platforms such as Facebook, Instagram, Twitter and LinkedIn to connect with potential guests, showcase your hostel and create engaging content. Social media is a great way to build a community around your brand, promote events and offers, and receive feedback from guests.

Online Reviews:

Encourage guests to leave positive reviews on online review platforms such as TripAdvisor, Google Reviews and Hostelworld. Good reviews help to establish trust and credibility among potential guests and improve your search engine ranking.

Paid Advertising:

Use paid advertising such as Google AdWords, Facebook Ads or Instagram Ads to reach a wider audience and promote your hostel. Paid advertising can be targeted to specific demographics or locations, and can be an effective way to drive traffic to your website.

Content Marketing:

Create valuable and informative content such as blog posts, videos, and infographics that provide insights on travel, local attractions and events. This type of content can be shared on social media and other platforms and can help to establish your hostel as a valuable resource for travellers.

Email Marketing:

Build an email list and use email marketing to promote your hostel, share news and updates, and offer special deals and discounts to your subscribers.

Partnerships With Online Booking Platforms:

Listing your hostel on online booking platforms such as TripAdvisor, Hostelworld, Booking.com, Makemytrip, etc will help you develop a strong online presence. There are several benefits of listing your hostel on an online booking platform. Also, you must have a booking engine for your page.

A hostel booking engine is a software application that enables hostels to accept and manage online reservations from guests. It allows guests to view availability, make bookings, and pay online. The importance of a hostel booking engine is that it streamlines the booking process, reduces the workload of the hostel staff, and increases revenue by allowing 24/7 booking availability.

Optimizing Google My Business for Hostel :

Boost your hostel’s online visibility and attract more guests to your property with Google My Business for hotels. You can maximize your hostel’s online presence and drive more direct bookings by listing your hostels like Google My Business for hotels. This will help you to take your hostel to new heights.

By following these tips, you can create a strong online presence for your hostel business and attract more guests to your property.

8. Hire and Train Staff:

Hire and train staff, including front desk personnel, housekeeping, and maintenance personnel. Hiring and training staff is essential for the success of a hostel business. Staff members are the face of the business and directly impact the guest experience. So, properly trained staff can improve guest satisfaction, increase repeat business, and generate positive reviews. Additionally, a skilled and motivated team can streamline operations and improve overall efficiency.

9. Implement Safety and Security Policies:

Implement policies and procedures for safety and security, such as installing security cameras, providing lockers for valuables, and enforcing quiet hours.

10. Continuously Evaluate and Improve:

Continuously evaluate and improve your hostel business, through customer feedback, marketing analytics, and regular maintenance and upgrades. It is necessary to remain competitive and meet the evolving needs of guests. Regular evaluation helps to identify areas for improvement, such as guest satisfaction, operations, and marketing.

A hostel can increase guest loyalty, attract new customers, and generate positive reviews by implementing improvements, such as enhancing amenities, upgrading infrastructure, or providing better service. Additionally, by staying up-to-date with industry trends and best practices, a hostel can remain relevant and competitive in the market.

Starting a backpackers hostel requires hard work, dedication, and a passion for hospitality, but it can be a fulfilling and profitable business venture for those who are willing to put in the effort. By following these steps, you’ll be well on your way to opening a successful backpackers hostel.

What Are the Challenges of Running A Backpackers Hostel?

Running a backpackers hostel can be a challenging but rewarding venture. Here are some of the common challenges faced by hostel owners and managers:

1. High Seasonal Demand: Hostels often experience high seasonal demand which can create pressure on availability, pricing and staff workload.
2. Intense Competition: The hostel industry is highly competitive, and hostels need to differentiate themselves by providing unique experiences and quality services.
3. Maintaining Standards: Hostel owners must ensure that their property maintains cleanliness, and security, and meets regulatory requirements.
4. Staff Turnover: High staff turnover can be a challenge for hostels, leading to reduced efficiency, lower guest satisfaction, and increased training costs.
5. Cash Flow Management: Managing cash flow can be challenging for hostels, especially during low-season periods.
6. Maintaining Positive Reviews: Hostel owners need to maintain positive online reviews, as they play a crucial role in attracting guests and building credibility.

To overcome these challenges, hostel owners should focus on providing high-quality services and creating a unique guest experience. Regular staff training and incentives can also help to reduce staff turnover and improve guest satisfaction. Additionally, effective marketing and revenue management strategies can help to attract more guests and maintain healthy cash flow. By addressing these challenges head-on, hostel owners can build a successful and profitable business.

Conclusion – How to Start a Backpackers Hostel

Starting a backpackers hostel can be an exciting and rewarding venture, but it requires careful planning, hard work, and a commitment to delivering high-quality services to guests. By following the steps outlined in this guide, you can lay a strong foundation for your hostel business and position yourself for long-term success.

Remember to focus on creating a unique guest experience, maintaining high standards of cleanliness and security, and continuously evaluating and improving your operations. With dedication and perseverance, you can build a thriving hostel business that provides a memorable and enjoyable stay for travellers from all over the world.

FAQs – Backpackers Hostel