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Having quit my job to start a backpackers hostel, 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.
After setting up India’s first backpacker hostel and watching it fail (long story), I hit the drawing board again and started from scratch. 3 years and 4 hostels later (check it out and give us a like), I’ve had my fair share of ups and downs in the backpacker hostel industry. The best part for me at the end of the day is that I’m in control of my precious time and my job allows me to do exactly what I want to do at any point in time. Life is mostly a holiday (except when the toilet’s broken). A couple of times every week someone at the hostel confides in me that their dream in life is to open a hostel. So, let me break down this process to give you a glimpse into what goes into the making of a backpackers hostel..
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.
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.
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.
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.
This is the bitch. Get started as soon as you sign your lease agreement. Unfortunately the procedures vary from place to place and my advice will be useless to you. Get all your information from the horse’s mouth, do the right thing and cover your ass. Always.
Once you’ve signed the house lease and applied for your licences, 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 (or maybe thats just because there’s no love lost between me and shopping). Having done this a couple of times I’ve come to realise that ready made stuff will always be inferior and less durable to custom made stuff. Backpackers are experts at breaking stuff. However, custom furniture and fittings cost a fortune. If you’re opening your first hostel, get it from the store and aim at keeping your costs to a bare minimum.
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. Backpackers are awesome people and incredibly forgiving when they realise that you’re making a genuine effort to do something special. Don’t wait for your hostel to become perfect (3 years down the line, we’re just getting started).
Throw open your doors and let the good times roll..
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.