Hostel business plan: all the information for starting your own hotel business
Dear visitors, below you can find an example of a hostel business plan with economic calculations. Calculations are prepared in Excel format, you can see them using google tables right on the site (you do not need to install anything). The sample was prepared by economists with more experience, so you can take it as a basis for preparing your document for a bank loan, a loan from an investor, or for delivery as a job to students.
Purpose: opening a hostel in St. Petersburg to provide affordable housing for students coming on vacation.
Tasks: Providing low-income citizens arriving in St. Petersburg with affordable high quality housing.
The initiator of the project is an entrepreneur of St. Petersburg, who rents out apartments for tourists coming to the city. The initiator has been in this business for over 10 years and decided to increase his income by arranging a mini-hostel, which would increase the profit from renting out apartments.
To open a mini-hostel, the initiator of the project plans to purchase a 5-room apartment on the 1st floor of a building in a quiet area of the city with its subsequent transfer to a non-residential fund, repair and furnish. The total cost of opening a hostel will be 9 million rubles, including:
- Purchase of an apartment and transfer to non-residential fund - 7,000 thousand rubles;
- Renovation of premises - 1,500 thousand rubles;
- Purchase of furniture and equipment - 500 thousand rubles.
Hostels are gaining popularity due to the fact that they can offer tourists and travelers a low budget accommodation option. If earlier the main clients of mini-hotels were students and young travelers, now they are actively occupied by adults, successful people with a certain life philosophy (downshifting).
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A typical hotel room is very similar to a student dorm room, often equipped with bunk beds.
The hostel, as a business, is of interest to entrepreneurs in Moscow and other large cities for the following reasons:
- Thousands of people come to the capital every year who need an overnight stay;
- the hotel business brings a stable income;
- it belongs to a small business , so there are no problems with paperwork;
- There are still few hostels for tourists in Moscow, but they are in great demand among city guests.
The downside is that finding a suitable room is not always easy. You need to consider each of the possible options, keeping in mind your main goal - a small hotel that generates income.
The best place where a dormitory can be located is in the city center. The footage depends on the number of guests, minimum - 10-15 beds.
The hostel can be organized in an ordinary apartment located in an apartment building. Renting one square space costs 15 thousand rubles a year. A three-room apartment will be enough to accommodate ten guests.
Another option for a mini-hotel is a separate building. One or more floors can be rented. The rental price per square meter varies from 10 to 15 thousand rubles per year. The construction of a separate house will cost about 5-6 million rubles.
How to open a hostel in an apartment
What is a hostel? This is a budget hotel, where of the amenities the guest is offered only a bed. A shared bathroom and kitchen are most often located on the floor.
With the growing popularity of budget tourism, such economy hotels are gaining more and more popularity. If we consider the hostel as a promising business, it is attractive with low organizational costs and can bring good profit with a constant flow of customers.
Today, this niche is almost free, which creates a fertile ground for opening a profitable business.
Select a location
The hostel should be located in places of frequent stay of tourists, business travelers and travelers - near train stations and the city center. This is where the first problem arises. The cost of land and premises suitable for setting up a budget hotel is too high.
An inexpensive option would be a building in one of the dormitory areas of the city with a convenient transport interchange (metro station, bus stop). A profitable solution would be to organize a hostel near the starting point of the tourist route.
If you wish, you can organize a hostel in a 3 or 4-room apartment for 9 or 12 beds, respectively.
It is important that the selected room meets the following requirements:
- each of the guests must have at least 5 sq. m of living space;
- the distance between beds must be 75 cm or more;
- there must be a bathroom, shower, washbasin on the floor, hot water is required;
- the presence of a common kitchen with a gas stove, refrigerator, TV and a minimum set of dishes will objectively increase the cost of living;
- the possibility of free use of the Internet is extremely important.
The buildings of the former (or existing) hostels will become an alternative option for the premises. The cost of renting rooms will require an increase in the cost of services or negatively affect the profit received.
You can learn how to start a similar business from the following video:
Reader Sergey A. asks:
I'm going to open a small hostel for tourists in Moscow. I wanted to download a ready-made business plan, but I found only general words on the Internet. How do I write a business plan from scratch? What should be in it? Maybe you can give a sample for free?
It's better to make a business plan yourself
Sergey, let's open a small hostel right now - let's call it “Sweet Pie”. First, a few general words, and then we will write an example of a short hostel business plan.
From experience, it is difficult to work without a business plan. It considers how much money is needed right away and in the following months, when the business will pay off and start making a profit. Without this, even during the repair, it may turn out that the money has run out. Or that you have invested in a deliberately unprofitable project.
In business, a person always risks money, so it is necessary to draw up a business plan, but it is not necessary to paint it like a graduate work of an economist student.
- write yourself. We'll have to figure it out in detail; maybe there will be mistakes - but remember for the rest of your life how to do it;
- download ready-made. Using someone else's option completely will not work, because often ready-made business plans are far from reality, but you can download and adapt for yourself;
- order from business consultants or a consulting firm. I do not recommend this method - you yourself will not figure out anything, but just get a list of incomprehensible numbers.
You can download a sample with calculations or order a ready-made business plan without us, so we will focus on the first method - we will tell you how to draw it up yourself.
The financial part is the most important
A business plan has two main components: a financial section and a marketing one. The marketing part in the hotel business is often not described, because most customers are brought by one channel - online aggregators like Booking and Ostrovka.
The financial part is more complicated. Here's what you need to calculate in order to have your own business plan for opening a hostel:
1. Investment in the project. Calculated from the cost of investment per square meter. This is done for convenience: when looking for a room, they consider several options. In order not to count the estimate for each, it is convenient to calculate the costs per square meter once, and then simply multiply by the area of the premises. You can also immediately understand which rooms are definitely not suitable, because the total amount is too large.
Often a person who finds himself in unfamiliar places needs temporary housing. There are usually enough hotels in large and medium-sized cities in terms of population, but not always a Russian can use this expensive housing - it will take a lot of money to rent a hotel room for several days. But you can use a hostel for temporary residence or a hostel for an inexpensive fee. After all, here the guest does not receive a separate room, but simply a bed. We will figure out how to open a hostel, how to draw up a business plan for opening a hostel from scratch, with the help of which a novice entrepreneur will be able to navigate this business.
Key project indicators:
Project cost - 4,650,000 rubles.
Average monthly revenue - 280,000 rubles.
Business environment at the hostel
Often hostel visitors are participants in various conferences held by public organizations. Of course, in order to satisfy the request for accommodation of participants in such an event, an enterprise is required that can provide housing for a large number of people at the same time. A hostel from an apartment won't work here. You will also need a room that can be equipped as a conference room and which will often be unoccupied. And the establishment itself, designed for a large number of guests, is unlikely to have a stable demand. Therefore, it makes sense to consider only a sample hostel business plan with calculations and talk about the profitability of a hostel created for a small number of clients.
Preparing a marketing plan
But the effectiveness of the organizational plan and the project itself as a whole depends on how actively and skillfully the advertising campaign will be carried out. There are also many important points in this issue. For example, contextual Internet advertising and newspaper ads cannot be dispensed with. It is necessary to post informational messages on the Internet services of travelers who are looking for hostels for themselves in the cities they are going to visit. Functionals of this kind, allowing you to book rooms in hostels, cost no more than 300 rubles per month of use. It is very effective in developing a business plan to include in it the distribution of business cards to guests, because they then pass them on to their friends, who are also actively traveling. You should not rely on the memory of your customers in matters of increasing competitiveness, since in this way any information is distributed much worse.
The very first step in achieving business goals at a hostel is to find a room that is rented out for long-term rent. You can't argue that a much better option is to use the premises that are owned, but to buy it, you will need funds in the amount of at least 5 million rubles. Usually, start-up entrepreneurs do not have such funds, and they conclude a lease agreement for the use of someone else's premises. Indeed, with lower initial costs and the cost of living of clients will be lower, and hence the final price of services. The cheaper the bed-places for the guests in the hostel, the higher the demand for them will be. In a rented space, expensive repairs are usually not required, this also reduces the size of investments.
The next step is to buy the necessary furniture and equipment. To provide the hostel with beds and common equipment you will need:
- washing machine;
- microwave oven;