5 Principles Behind Successful Hostel Operations
Hostel operations are not rocket science. The vibe is usually informal, and guests (mostly) do not freak out, even if you check them in at 8 am with a beer in your hand. However, as the checkins blur and days become years — universal pattern begin to reveal themselves. Turns out that as unique and the individuals may be, order of the group begins to emerge from the chaos of the individual.
Once you understand the behavior, you can cobble together a few underlying rules of how to smoothen your operations. I hope I can save you some time by going through a few nuggets of collective wisdom that we have learned over the years at our hostel.
1. Group Dynamics
To be a successful owner, you will need to master this subject pretty quickly. Contrary to what you believe, the whole hostel train runs with group dynamics (and not solely you) as the driver. Fortunately, you are the person building the hostel and laying the train tracks. The core value of a hostel lies in its ability to foster a community of travelers. And where there’s a community of people, there’s bound to be certain rules that govern the group’s behavior.
In the case of a hostel, people don’t usually have adequate time to size each other up, so the governing law becomes peer pressure (in colloquial terms — monkey see, monkey do). Guests that check into your hostel will immediately look to the larger existing group for cues and answers. If the group signals that everything is good and the hostel is safe, the new-comer is reassured and put at ease.
You have to actively evaluate and monitor whether the group is behaving as per your expectations. If they aren’t, then it is your job to make a change and fix the train tracks. An example would be a scenario where your hostel is priced too high in the sense that the price-value equation isn’t correct. The moment one person finds a cheaper alternative delivering a comparable product, the whole group will soon be ‘educated’ about this price difference. Furthermore, if one person takes action and checks-out, you can bet your socks, the rest won’t take much time to follow. The same goes for loopholes in your cancellation policy, unlocked beer storage, etc etc. Tribal wisdom travels quickly. Beware!
2. Momentum
If you have a fully booked hostel, it will remain fully booked, and if you have an empty hostel, it will remain empty. If group dynamics is the driver of the train, then momentum is the fuel. Momentum is your friend, so treat it with respect and do not do anything that might cause a mass exodus from your hostel. If you do identify people are checking out by the truckloads on more than one occasion, it is of utmost importance that you find out why, and then begin to take steps to mitigate this issue.
The law of momentum goes beyond your hostel beds and applies to your tours, activities and bar. I know more than a few hostels that fake their momentum by listing imaginary people as the first signups of their bar crawl to entice the first real person from signing up. You could also hack this rule by offering discounts or freebies for the first-mover.
3. Free Breakfast
I have seen guests stack their plates up with breakfast, lunch, dinner and then some more at the free breakfast queue at our hostels. Free breakfast is the one meal that superficially hurts hostel entrepreneurs because it is a cost that eats into the bottom line. On the bright side, for every guest that eats for two, there’s another that doesn’t show up. So the scales balance themselves over a period of time. From an accounting perspective, it would be good for you to average out your breakfast cost over a month per person per night and mentally add that into your room price. It will definitely help you deal with the stress of overloaded plates.
More importantly, though, breakfast is the time of the day when people make plans. The effect free breakfast has is it encourages the community to assemble at one place within the hostel at a fixed time. The new people make friends and get inducted into the circle. The only way your hostel can be greater than the sum of its parts is if you can create a strong traveller community within the hostel and free breakfast is one winning strategy. Many hostels offer happy hours or other schemes, all with the same effect. I’m a fan of the free breakfast because it is a prelude to the events of the day.
4. Always Stay Open (unless…)
Possibly the most important principle for a successful hostel. Do not give up hope and do not assume that nobody will come and stay with you. If you take a shortcut and shut down because of low occupancy / off-season, you are abandoning business for personal convenience. As ironical this rule may seem in our current Covid crisis, you can still show up at your hostel and work on getting your business to the next level. Compound interest is possibly the most powerful force in the universe and if you apply this rule to your business, your hostel is going to go places.
5. When in Doubt, Be Human
Things will inevitably go wrong, more often than not! Odds are, after a while, you will learn pretty much everything through experience. Whether you’re dealing with an angry guest or a hysterical staff member or in general, when you find yourself scratching your head with no idea about how to begin, remember this strategy.
And while you’re being human, you should remember that the person on the other side is human too. Deal with the elephant in the room right away and try and understand their concern. More often than not, once you’ve invested some time in listening, the other person will give you the same treatment. And once you’ve fixed the problem, go one level deeper and ask yourself what would be the best way to fix this particular problem so that it never happens again. Once you have mastered this skill, the next step would be to anticipate issues so that they can be solved even before they happen. If you take this advice seriously, I can guarantee that you will not have a single free minute in your day 😀
