How to open a hostel from scratch: pros and cons

To date, the real estate market is developing most actively, and the hotel business feels a special ascension, because every day a considerable number of hostels and other mini hotels are opening. Such a stir is connected with the popularization of travel, both within the country and abroad. That is why aspiring entrepreneurs have a question - what is a hostel and how does it work and how to open a hostel from scratch? To learn how to do it correctly and legally, read this article.

What is a hostel

The hostel is the same hotel, but differs in its layout and concept. In this place, every tourist can spend the night for 10-15 dollars. The main essence of the hostel is not a place to sleep, but live communication with tourists from different cities and countries. This is necessary to expand the cultural worldview, since in this way you can learn about other cultures, countries, their customs, and so on.

Also, a distinguishing feature of the hostel from the usual hotel is a shared kitchen, shower and bathroom and beds with different capacity people. For example, in one room, 4 people can sleep in different beds. At the same time, the space in the room should be divided in such a way that the guests do not interfere with each other.

Pros and cons of a hostel as a business

There are many benefits at the opening of the hostel:

• The opportunity to realize various creative ideas in terms of interior design by making a themed hotel.
• Large client flow and demand for affordable housing.
• Due to the fact that a mini-hotel is considered a small business, there will be much less problems with paperwork.
• The absence of competitors, since in our country such a concept as a hostel is just beginning to emerge.
• Self-planning hostel.
• The possibility of expansion shortly after the opening and the considerable prospect of opening a whole chain of mini hotels throughout the country, and later abroad.

But, nevertheless, such a business has its own limitations. Basically, they are associated with some features of this type of hotel:

• The inability to assign distinction stars to your business.
• The risks that the owner may face when opening a business that is still atypical for our regions (small occupancy at first and other shortcomings that are compensated in the future).
• Various client flow, which may include not very pleasant and clean clients. But, as they say, people are different, but business is business.

Where to open

Well, where and how to organize a hostel? - this is the first question that newcomers to the hotel business ask. There are several options for where it is best to open a hostel:

• Rent or buy the premises and completely re-equip it.
• Use your own apartment (mostly in which no one lives, for example, if it was inherited) and convert it into a modern hostel in a residential building.

How to open a hostel from scratch in an apartment? Refurbishing an apartment that is already in your own property sounds much more attractive, as you can save on the purchase or rental of housing, which will increase your start-up capital and bring more ideas to life with additional cash. But, before you open a hostel in your home, you need to take into account the fact that the owner will need to redevelop the living space, since the concept of such an institution provides for the almost complete absence of hotel rooms. Making redevelopment to the owner will cost 10 thousand rubles.

It's important to know: in order to legislate your business, there must be at least five squares per client, and the gap between beds should not be less than seventy-five centimeters.

Hostel in law

So, how to open a hostel in an apartment legally. In order to draw up all the documents at the legislative level and provide a service to your customers as a small entrepreneur with all the ensuing consequences, you will need to pre-register business activities. According to the current legislation, all hostels must carry out their activities by paying a single state tax and are payers of the 3rd group of taxes.

In addition, residential premises must comply with state standards, according to which various services will be provided. Certificates of compliance with the conditions are issued by specialized bodies that have been accredited in accordance with the current norms of the state standard. After completing all the necessary documents, you can safely open your own mini hotel.

It's important to know: it should also be noted that all received documents must be available to customers and be in the buyer's corner along with a book of complaints and suggestions. Thus, guests will be able to familiarize themselves with the compliance with all standards.

How to choose the right staff

If you want your brainchild to function like a clock, you need to select a team of responsible professionals who understand their work. If for hotels such a suite will cost more than one hundred thousand rubles, then for a small hotel it is mere trifles, since you may need only 2-3 specialists.

Hostel zoning option

Let's move on to arranging

In order to fully equip the hostel, you will need 250-300 thousand rubles, taking into account the full payback in a year or two.

Hostel business plan with calculations.

The location of the mini hotel, taking into account the nearest competitors

As a rule, demand creates supply, and despite the fact that the hostel business is not yet as actively developed as abroad, the active demand for inexpensive accommodation while traveling creates more and more competitors. It is advisable to locate a mini hotel in the city center, where there will be good transport interchange, many shops and shopping centers, as well as the ability to quickly see the main sights of the city.

Before you open, it is recommended to study the area you have chosen for the presence of competitors, and if there are any, then you need to come up with a way to lure customers to your side. This may be: active advertising, creative design of housing space, adequate pricing, and so on. Also very important is the view from the window that will open to the guests, as this is the first thing they see in the morning, and this, as I rule, consolidates the overall impression of the hotel. Also, the next visit of customers to your guest house depends on other important factors.

Where to spend start-up capital. Hostel project

So, the problems with housing have already been resolved. All that's left is to get it all right. Today, small family-type boutique hotels are very popular, where the design of each room was created by an eminent designer. In order to attract more customers and make your business truly creative, you can implement a similar idea, but only in a budget variation. Vintage style has become widespread, which creates a cozy, but at the same time extraordinary atmosphere. This is what we will be inspired by when creating a common interior.

Vintage in the interior

• First of all, you need to buy vintage furniture. You can buy specially aged fittings in a hardware store or save money and buy truly vintage furniture (by the way, the second option will not only help you save money, but also bring an indescribable atmosphere to your guest house). The cost of a full set of furniture in the store will be 100 thousand rubles, and in vintage 50-70 thousand.
• Next, you need to purchase the necessary equipment: a TV, a Wi-Fi router, heaters, a coffee machine, a washing machine, a refrigerator, and more. In this case, it is better not to save money and buy everything new, since vintage should be in moderation, or that unusual atmosphere that is created by furniture and accessories will be lost. The average set of necessary machinery and equipment will cost 80 thousand rubles with delivery directly from the store.
• Bed linen must be chosen from a quality manufacturer and not from synthetic materials, otherwise it will be uncomfortable and hot to sleep on such sheets and duvet covers. In addition, according to the standards, mattresses must be orthopedic in order to make customers feel comfortable. A set of bed linen and mattresses for an average mini hotel will cost 18-20 thousand rubles.
• Vintage decoration. One wall in the main hall or hall must be styled antique. Stick thick photo wallpapers with the image of old St. Petersburg or Moscow, put black and white photographs on the next wall and assemble a collage from them. The cost of such a design will be 20-25 thousand rubles.
• Completion of the interior with special accessories. Well, in order to finally complement the interior you created, you will need to buy a lot of different figurines, paintings and other things. You can buy everything directly from the store, which will cost 15-20 thousand rubles, or buy really vintage things at flea markets, buying and selling sites (for example, on Avito), which will save half the money set aside for the final transformation.

In total, the above-mentioned 250-300 thousand rubles were obtained, which were spent on registration. But, do not forget about the additional waste that awaits a businessman at almost every step.

Marketing program and advertising

In order for as many people as possible to know about your hostel, you will need to spend several tens of thousands of rubles on advertising. This includes: creating your own website or blog on a social network, advertising around the city (billboards, leaflets, flyers, etc.), as well as making your own, unique logo that will show off at the entrance to your mini hotel.

Line costs

In this column, you can include payment of utilities, payment of wages, repair of broken equipment, furniture and other expenses that are necessary to maintain the hotel in a fertile state. In addition, do not forget about the costs in the form of payment for the Internet and cable TV.

Payback

As you can see, to open your own hostel, on average, half a million rubles is needed. Agree, the amount is rather big and naturally, most businessmen are interested in the payback of such a business. Naturally, the hotel business will pay off in any case, but there is another question. When?

As a rule, a mini-hotel fully pays for itself in 2-3 years (the first six months do not count, since in most establishments there is a stagnation of visitors when the total occupancy of the hostel is 30%). In order to avoid such downtime and start recouping the money spent earlier, it is recommended to carry out special promotions during the period of stagnation, reducing housing prices by 50-70%. Naturally, such a “generosity attraction” will attract new guests.

The hotel business is experiencing a special uplift. Such a stir is connected with the popularization of travel, both within the country and abroad.