Hostel business plan

In the context of the economic crisis, more and more people are thinking about saving money on travel, especially on accommodation. With the development of hotel service, many people today prefer not expensive hotels, but practical and inexpensive hostels, which leads to the opening of such a business project. In this article, we will present the hostel business plan in detail and tell you what main points you should focus on in order to launch a successful project.

Experienced businessmen know that the beginning of any project is preceded by a stage of careful planning. No matter how original and relevant the business idea is, without strategic planning, analysis of the competitive environment, market capacity, it is impossible to launch a project.

In the absence of initial capital, it will be necessary to apply to investors or to a bank for a targeted loan, where you will need to justify the feasibility of your business idea. As for attraction and investors, it is important to understand what financial obligations this entails.

A competent and detailed business plan will become a step-by-step guide in the future that will allow you to achieve your goal without deviating from the main idea.

The document reflects all aspects of the activity and helps to plan the sequence of actions necessary for the successful implementation of the company's goals.

When starting to write a business plan, you need to:

• perform a justification of economic feasibility (relevance of the idea);
• make an analysis of the environment in which the business will develop;
• consider sources of funding if necessary;
• create a schedule for completing tasks.

The attractiveness of a business idea

Of course, before starting an activity, it is necessary to carefully analyze the relevance of the idea and evaluate its prospects. Despite the great competition in this area, this project is a profitable business.

A hostel is a small hotel, furnished like a hostel. A person is provided with a bed without additional amenities in the room, while one room can accommodate from 2 to 10 people.

The payback rate of the hostel will largely depend on the attractiveness of the region in terms of the tourist route, location, season.

It is also very important to correctly determine the target audience of the business. Unlike the audience of the hotel, the hostel is chosen by sociable people who, in addition to economic benefits, choose such an overnight stay from the point of view of social activity.

It’s not particularly possible to retire in a hostel, so this accommodation option is more suitable for young and active people who are looking for communication and are not averse to sharing a room with other tourists.

Hostels usually gather positive open people who, even after a hard tourist day, communicate with pleasure and share their impressions. Understanding the specifics of this direction and the target audience will allow you to create a successful project.

Hostel business plan diagram

In order to make it easier to write a business plan for opening a hostel, try to rely on standard points:

1. Summary.
2. General provisions.
3. Market analysis.
4. Product description.
5. Marketing and strategic plan.
6. Costs.
7. Production plan.
8. Organizational plan.

Evaluation of a business idea: pros and cons

Before proceeding with the preparation of the document, let's analyze the advantages and disadvantages of this project, identifying the strengths and weaknesses.

Advantages:

• High demand. In many ways, this aspect depends on the attractiveness of the region and the location of the hostel. But if you carefully analyze the tourist routes and choose the right place for such a mini-hotel, then you can quickly reach a good profitability.
• Regular customers. With a properly developed marketing strategy and a high level of service, you can occupy your niche in the market.
• High income opportunity. Well organized hostel, cost-effective at 30-35% of the settlement. And already at 50% of the settlement, it begins to generate income.

Disadvantages:

• High competition. On the other hand, high competition is associated with high demand for this service. Therefore, if you correctly analyze the competitive market and offer customers a really high-quality service, you can take a leadership position in the market.
• Large start-up capital. This business is associated with large financial investments, without which it will not be possible to organize a hostel. Renting a room or purchasing your own property, renovation, purchase of furniture and equipment - all this will require investment.

How to open a hostel - where to start?

Before you start calculating how much it will cost you to organize a business, you need to determine what size and concept your mini hotel will be.

Target audience - tourists

There are three types of hostels:

• Small hostel. This option can be opened in a residential building by buying one or two small apartments. The hotel is designed for 10-12 people and allows you to create 3-4 separate rooms for overnight stay and a common area for recreation. This hostel is quiet, comfortable and many tourists like these accommodation options. Compared to other hotel options, you won't need much investment to open this project, but you shouldn't expect big profits either.
• The average hostel is designed for 50 guests. Usually, to organize such a mini-hotel format, the owners buy out 3-4 apartments on the same floor and combine them.
• A large hostel can accommodate up to 80 guests and already involves a significant investment. Owners, as a rule, buy out part of apartment buildings or build separate mansions, originally designed for the hotel business. This is a more convenient option for tourists, which, in addition to rooms for the night, may contain a common area for recreation, a spacious kitchen, a mini laundry room, a bathroom and showers. The downside of this option is a large investment, pluses - the possibility of large profits.

Business plan for opening a hostel

1. Paperwork

To start a business, you need to register as an individual entrepreneur and obtain a Certificate that gives you the right to conduct business.

Perhaps, to implement a larger project and provide a wide range of services, you will need to register another form of ownership - LLC.

When contacting the tax office, prepare the following documents:

• passport of a citizen of the Russian Federation;
• receipt of payment of the state fee (800 rubles).
• Application form P21001.

The next step will be registration with the Federal Tax Service and the extra-budgetary fund, where you will be asked to choose a taxation tax.

To open and conduct such a business, it is necessary to obtain a License. This document gives the right to provide public services.

For a medium-sized business, it is advisable to choose a single tax. In the future, with the development of the project, you can always switch to another form of taxation.

After registering all the primary documents, you need to get a conclusion from the fire inspectorate and the sanitary and epidemiological station that the hotel complies with all legal standards.

In order to obtain such a Conclusion, the following documents must be submitted to the relevant authorities:

• passport of a citizen of the Russian Federation;
• IP registration certificate;
• a document confirming tax registration;
• a lease agreement for premises or a document confirming ownership;
• medical books of employees (in the event that you hire staff).

After you have realistically assessed your financial capabilities and determined the format and scale of the business, we begin to search for a suitable location.

The location of a successful hostel must meet the following criteria:

• successful transport interchange;
• attractiveness in terms of the tourist route;
• place for parking;
• quiet cozy area.

Many owners prefer to open hostels in the city center, which provides good traffic. The downside of this is only the high price of real estate, which will significantly reduce the payback period.

It is advisable to open a hostel in a prestigious area with good traffic and transport interchange.

There are certain requirements for the premises of a mini-hotel, which cannot be deviated from:

• The minimum area per guest is 5 sq. meters;
• the bed must measure at least 80 by 190 centimeters;
• the distance between the beds is not less than 75 centimeters.

For the number of guests up to 12 people, it will be enough to equip 1 toilet. On a larger scale, it is necessary to equip additional toilets. Shower - maximum for fifteen; sink can be one for 6 clients.

Design and redevelopment will also require large financial investments. You can arrange a mini-hotel in a simple minimal style or give it some thematic concept.

Of the mandatory equipment and furniture, you will need to buy:

• beds (in the number of beds) - to save space, you can take bunk beds;
• mattresses;
• towels and bed linen;
• folding extra beds;
• desk and chair for the administrator;
• chairs for a recreation area;
• furniture and utensils for the kitchen;
• sliding wardrobes for a wardrobe;
• household appliances: hair dryer, iron, washing machine, electric kettle, microwave oven.

It is also mandatory to organize a free Wi-Fi zone.

This is the minimum that must be in a modern hostel. If you want to stand out from the competition and realize an original high-quality hostel, then you can additionally equip a playroom for children, make a room for keeping animals traveling with their owners, install TVs and game consoles, purchase laptops, etc.

Cozy renovation and comfort of guests is the key to the success of this business.

When organizing a comfortable level of service for your customers, consider what exactly will be included in the set:

• sleeping place;
• providing a kitchen area with the necessary utensils and utensils;
• bathroom (shower, toilet);
• rest room (with TV, laptop, game console);
• WiFi;
• use of washing machine, iron.

1. Staff

Even a small hotel will require several staff members who will serve the hotel, providing quality service.

Marketing plan

As mentioned above, the main target audience of hostels are active tourists who do not plan to spend a large budget on accommodation. Good advertising of the hostel will ensure its round-the-clock occupancy.

Let's characterize a potential hostel client:

• a person with an average level of income;
• age from 18-30 years;
• frequent traveler or business traveler.

As a rule, tourists learn information about hostels and mini-hotels from the Internet, so much attention should be paid to promoting the services of this particular industry.

Over time, when you take your place in the market, you will definitely have your own base of regular customers and a “good reputation” that will help spread the word about the hotel.

But at first, you will have to spend a lot of money and put in enough effort to promote the hotel.

• Internet advertising;
• social media;
• online booking networks;
• partnerships with educational institutions;
• cooperation with travel companies.

Don't waste your money on low-performing ads that won't get customers in your business. Focus on promoting services on social networks, on various online travel partner sites, etc.

You will definitely need to create your own website, which will reflect up-to-date information about the hotel, range of services, rooms and prices. With a small scale of business, you can include in the list of functional duties of the hotel administrator the content of the site, control over the relevance of information. The site should have several interface languages, allowing tourists from other countries to order the service.

Production plan

The main production costs include:

• buying real estate (or renting);
• purchase of furniture and equipment;
• room renovation.

We present only an approximate cost plan for opening a hostel, which is designed for 15 guests in a small city of 350 thousand people.

The plan is drawn up taking into account the lease of the premises. With the option of buying real estate, this amount must be added to the total costs, which, of course, will significantly change the payback period of the project.

The expenditure part of this project includes the following items:

• monthly rent of premises (150 square meters) - 30 thousand rubles;
• repair, purchase of furniture and equipment - 150 thousand rubles;
• staff salary (4 people) - 80 thousand rubles;
• advertising (monthly) - 10 thousand rubles;
• utilities - 15 thousand rubles;
• additional expenses - 5 thousand rubles;

Total: 280 thousand rubles.

We calculate the income for 15 people:

When determining the pricing policy of your business, you need to carefully study the market in your region and the offers of competitors. It is important to understand what exactly competitors include in the standard set of services.

In some hotels, the price consists of only one bed. Other hostels in this amount include breakfast, free access to the Internet, an excursion program, etc.

The cost of living 1 person / day 500 rubles, load 80%

12 people * 500 * 30 days = 18,000 rubles

Calculate payback:

280 thousand rubles / 18 thousand rubles = 15 months.

Additionally, to increase profitability and increase profits, you can implement related services:

• laundry, ironing;
• snacks in vending machines;
• TV, game consoles;
• excursion services;
• nutrition;
• transfer, etc.

Risks and guarantees

To determine the strengths and weaknesses of the business, we will perform a small SWOT analysis.

SWOT analysis is an analysis that identifies the strengths and weaknesses of the project, external threats and ways out of them.

Strengths of the hostel:

• high quality of service;
• low cost of services;
• high demand;
• minimal financial risks, because the bulk of the costs are for the purchase of equipment and payment for real estate.

Business weaknesses include:

• large investments;
• lack of parking;
• high competition.

Threats:

• economic instability in the country;
• emergencies, accidents;
• low level of qualification of employees;
• seasonal demand.

Project features:

• increase in demand;
• increase in advertising;
• offering an additional service.

For a business to really work and generate income, it is enough to follow a few simple but effective rules:

• Carefully study the competitive landscape in your area and highlight the best and worst hostels. Determine the disadvantages and advantages of each and draw conclusions for yourself.
• Constantly personally exercise control over the condition of the rooms, cleanliness, quality of service.
• Keep track of profits and expenses. In order for the hostel to be cozy and clean, it is necessary to constantly invest in funds for cleanliness, cosmetic repairs, and replacement of broken equipment.
• Find your own "chips" that will favorably distinguish you from competitors.

Video. Hostel business plan