The idea of hostels is not new. Back in 1909, a teacher from Germany, Richard Schirman, discovered that it was almost impossible to find a suitable place in the country to temporarily accommodate a group of students who periodically traveled with him. He decided to correct this situation. He did not think long about how to open a hostel and equipped it right at the school where he worked.
Of course, over time, hostels have ceased to be just a budget accommodation. They developed and turned into an interesting space for active people. And the hostel is a profitable business project, with the right investment, of course.
First there was... a business plan
When creating any business, you should start by monitoring the market. If you are planning to open your own hostel in Ukraine, you need to analyze which cities have the largest tourist flows. Then determine the location of your object. Ideally, if it is located near a train station or a major metro station. Be sure to find out if there are any other hostels or economy class hotels nearby.
Once you have decided where the hostel will be located, you need to create a detailed business plan. It should include all expenses for launching your project and maintaining its normal functioning. Namely: repair or reconstruction, number of beds, bed linen, plumbing and more. We recommend that you create a business plan as a full-fledged financial document: with tables, graphs, calculations, and risk assessment. This will make it easier for you to correlate numbers and show it to potential partners or investors. And in General it is convenient.
Answer to the question "how much does it cost to open a hostel?» it depends on what you have at the start. If you have your own housing, you will need funds for its reconstruction. As a rule, this includes cosmetic repairs, installation of additional bathrooms and equipment, partitions, bed linen and hygiene products. In this case, from 10 to 20 thousand dollars will be enough.
With an average occupancy of 70% , your investment will pay off in two to three years. If you provide customers with high-quality service and positive emotions, word of mouth will work in your favor and provide you with a 90% occupancy. Then your investment will be returned to you in 17 months.
These are quite optimistic forecasts if you adhere to the three main principles of providing service in hostels: cleanliness, high quality of services, and a good location of the object.
If you plan to buy real estate and equip a hostel there, you will need to spend at least 100 thousand dollars at the start.
Important that there is no clear definition of “hostel" in Ukrainian law. As a result, there is no accounting and control over their appearance and development. But there is a concept of "communal apartments with multi-bed accommodation, offering long-term accommodation". There are no official statistics on their number in the country either.
But according to the site data Booking.com there are 430 hostels in Ukraine. 46 of them are in Odessa.
The resource also has interesting facts. The fact is that currently there are more than 11 thousand accommodation facilities in our country. For comparison, two years ago there were 3,500 of them.
The good news is that the design of the hostel is much easier than any other object in the hotel and restaurant sector. In other words, the documents that will need to be prepared will not take much time.
Even before the object is launched, the business owner must register as an entrepreneur. It can work under a single tax, in the third group of taxation. For such codes of the classifier of types of economic activity: 55.10, 55.20, 55.90. It should be remembered that in this case it is necessary to adhere to the state standards of residence – 4527, 4268, 4269.
To make guest’s stay comfortable
Learn more about the requirements for opening a hostel. They are not as strict as hotels and restaurants, but some points are mandatory:
- The hostel must be equipped with a bedroom, bathrooms, and a common room. The kitchen is desirable, but not mandatory.
- The total area of the room should be from 100 to 200 square meters.
- Rooms must have windows.
- The ceiling height must be at least 2.5 meters.
- There should be 5 square meters of space per person.
- The calculation for the number of guests should be as follows: one bathroom for 12 guests, one shower cabin for 15 guests, and one sink for 6 people.
- The average size of a bed should be 190x80 cm, and a double bed should be 190x140 cm.
- The distance between the beds must be at least 75 cm.
These requirements, of course, are not an absolute guarantee that the stay in the hostel will be comfortable for rest and work.
Artem Dmitrichenko, Manager of the Friday hostel chain, explained this situation:
Most hostelers equip their object without thinking about such small things as where, for example, the outlet should be located. That is, they completely do not understand the concept of the space in which the guest will stay. And it is not uncommon for a person to settle in their zone and realize that there is no outlet nearby to charge their phone or laptop. And in the XXI century it creates a queue to the outlet. This is ridiculous! To avoid this, I'm not afraid of this word, shameful situations – we equipped our hostels according to European standards. We tried to think of everything. We divided the space into zones. The lobby in our hostel includes a recreation area and a coworking area. There are no outlets in the play area at all. It is designed for people to communicate with each other, not be distracted by gadgets, play Board games, read paper books. In the evenings, we arrange a movie theater in it. But in the coworking part there is everything for comfortable work: suitable lighting, furniture and, of course, power outlets. The kitchen is designed in such a way that it is comfortable to cook and eat there. Each zone implies specific actions of the people who are in it.
There is a large reception desk. The administrator plays the role of a good friend. Guests can order a cup of coffee chat, ask for useful contacts, share life stories. Therefore, I advise you to be very careful about the selection of staff. There is much less of it in the hostel than in other facilities, so the staff and their attitude to work will affect your ratings. Perhaps the fact that we took into account all these factors and helped us to enter the top five hostels in Europe and become the best in Ukraine.
It is the rule that properly selected staff is 90% of success.
A lot of attention should be paid to the administrator, who will meet guests, advise on basic issues, and help in case of difficulties. It should be a person-orchestra: a sociable person with excellent organizational skills and basic skills of management. The administrator is the chief conductor in your hostel band. They can conduct entertaining master classes, organize themed parties, and recommend interesting routes.
It will be a plus if other team members are also involved in the process of quality service as much as possible. For example, technical staff should know all guests by name, greet them, and wish them a good day.
Hostels are gradually moving away from the principle of selling only a bed. They seek to keep their guests, encourage them to return, or recommend them to friends and acquaintances. And for this purpose all additional services - are good. For example, in the Odessa hostel "Friday" fruit and champagne congratulate each guest on his birthday, if his holiday falls on the time of stay.
Some hostels take the nearest cafe as a partner and offer their guests a very pleasant discount. Others register as tour operators and offer guided tours of the city. It doesn't matter what you choose as an additional service. The main thing is to remember that our service is what will distinguish your object from the competition.
Immediately give up flyers, brochures, and other papers to tell about yourself.
Your audience is online. So let's look at the most popular tools for its promotion.
As an example, I will give the experience of Odessa’s Friday. The children began to actively talk about interesting events and people who stay in the hostel. As a result, the hostel's Instagram became very lively and, to everyone's surprise, it started selling reservations. Yes, people came in, scrolled through photos, read posts, and wrote to Yandex. direct with a request to book a place for a certain time.
- Website. Simple interface, high-quality photos and the ability to book a room directly on the site. At the same time, make sure that the user of your resource does not have to search for the "book" button or open any tabs for this purpose. Everything should be as accessible and clear as possible.
- Contextual advertising in Google will lead you to those who you hover over the query pool by entering the region, price range, and other criteria.
- Social network. This is one of the best channels of communication with the audience. Just don't make the mistake of advertising the hotel's website itself. Tell us about your most interesting guests, favorable discounts, nice bonuses and other tempting buns.
- Don't skimp on beds and mattresses. The main goal of most of your guests is to get enough sleep. Therefore, they will be the most used. On the eve of the opening of the hostel, buy the best quality beds and mattresses from the model range offered to you.
- During the cold season, offer extra blankets. This increases the level of comfort in the hostel and ratings on booking.
- Periodically hire a photographer and update the photo content on the site. Remember, you are not alone in the market.
- The bedroom in your establishment will look more cozy if you place additional miniature pillows on the beds.
- Do not try to make a design in the hostel that looks "like home". 70 % of respondents… Think about it-70% of people said that they like when the design of a hotel or hostel is different from their home atmosphere. And more than a third of the guests surveyed admitted that they spent more time in the rooms because they liked the design!
Pros and cons of hostels
- Whatever the price category of the hostel-accommodation in it will always be cheaper than in the most budget hotel.
- There have always been, are, and will always be travelers, students, and business travelers who want to settle down for the night without spending all the money in the world.
- There is a long-term growth of tourist flows in the world. And a huge percentage is accounted for by people who want to stay in inexpensive apartments.
- In the hostel you can check in with a large group of friends and have fun.
- People from different countries usually stay in hostels, so you can make very pleasant and diverse acquaintances there.
- Most hostels have kitchens where you can prepare your own meals. This way you will be able to save not only on the cost of housing, but also on food.
- There is no personal space. Except for your own five square meters. But if you are used to traveling, all the time communicating with people, then for you this point can be translated into advantages.
- If you want to travel on a budget with small children, be prepared for the fact that the guests in the hostel will be, to put it mildly, not happy to be in the same room with you.
- Traveling with animals will also be problematic. Most hostels do not accept a person with four-legged friends.
- Theft happens. To avoid this misfortune, put the most valuable things: documents, keys - in the safe.
- In some hostels, you can meet people from all walks of life. These meetings are not always pleasant. Therefore, we recommend that you pay attention to the cost of your stay when booking a hostel. Choose those where the price is slightly higher, then you will ensure a relatively quiet holiday.
Hostels are definitely developing in quantitative and qualitative directions. Over time, they have more and more advantages and there are impressive successes in the fight against disadvantages.
They are cost-effective, popular, and therefore very promising and attractive for investment.