Case Study – How To Market A New Hostel Business

Back packing is a way of travel that has become a favourite of many across the world. In the US alone, there is an average of around 20 million backpackers annually. For any business mind out there, this means only one thing; business opportunity and a backpackers’ hostel would be the one of the best options. A place where you can provide all the tired and travel hungry backpackers a good place to rest and refresh as they take on the rest of their trip. So how can you start a backpackers’ hostel? Well, in this article I will share with you some simple steps to start your very own backpackers hostel.

  1. Choose an appropriate location.

You want your hostel to be located in an area where most backpackers pass through and can access conveniently. Having the cheapest and most lavish hostel but located way off course would spell doom for your business. To identify the best spot, you could go backpacking yourself in the area. By doing so, you will experience what other backpackers are likely to experience. In addition, you get to interact with other backpackers and get information, vital since they will be your customers. To get additional information, you could link up with nearby tourist services and get data on areas where backpackers frequent.

2. Do the math

As you start the business, you need to make sure you have your numbers right. You need to take into account the cost of purchase or renting of the building, cost of renovation of the building, buying bunkbeds, beddings, Kitchen ware, additional washrooms and the running costs of the hostel. These costs will help you arrive at a suitable pricing of your hostels. Most backpackers are usually on a tight budget so you don’t want to become very expensive but at the same time incur losses or low profit margins. It is recommended that a thirty percent occupancy should be able to cover all your running expenses such as water and electricity.

3.  Consult the relevant authorities

After all the initial investment, nothing would be worse than having your business shutdown due to in-compliance with health or safety standards. After you have identified the area you want to locate the hostel, go to the relevant offices and inquire on the regulations. This is also important because different regions have different laws. You should also ensure you acquire a license for you to start operation and choose a suitable renewal scheme. If the building you have acquired does not meet them, make the necessary adjustments in consultation with the landlord if you are renting.

4. Link up with local tour service providers.

As we mentioned earlier, tour service providers can provide you with demographic data. However, you could also use the relationship to offer information to your guests on the sites in the area and the tour service providers available. You could have posters on your reception and also offer contacts to your guests. This would in turn increase you chances of being recommended by the backpackers to other backpackers.

5. Get employees

Running a one-man show can be quite a handful especially when you are handling many guests.  You should, therefore, get employees to handle the different units of the hostel, such as the reception, kitchen, and cleaning. This can also apply when you will not be operating the hostel yourself.

After you have acquired the building and everything else is set, you are ready to start business. However, you need to start operation before the busiest season starts. This will help you identify any flaws or voids and brush them out before there is a large inflow of guests.

You should also get the word out there about your new hostel by advertising on travel websites or other appropriate means and you will be on your way to running a successful backpackers hostel.

6. Finally, and most importantly of all – get seen online! Free traffic is available on Google if you are on page 1. An internet marketing or SEO company can help you achieve this. You can make 5 times back what you spend on SEO in extra sales you would not have normally had so go do it!

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