Ideas to generate extra revenue for your hostel
We know of hostels as open windows to the world, neutral places that encourage different cultures to gather around a breakfast table and create memorable experiences.
As an industry, we have a few advantages over other hospitality segments. Firstly, most of our guests are leisure tourists. They want to have a good time, try local gastronomy and experience the city. They are actively looking to spend money and experience what your location has to offer.
And secondly, unlike restaurants, for example, that struggle to attract new clients for lunch every day; we already have our guests sleeping in their beds, and at a certain point, they’ll get hungry! And probably, the hostel staff will be their first option when asking for a recommendation. There is also the local community that’s always looking for opportunities to socialise with foreign travellers, especially among Millennials and Generation Z.
When talking about creating new sources of income and generating external guest traffic, it’s a good idea to consider mixing it up with both scenarios in three steps:
- Find partners who need a physical structure to serve their customers
- Provide local experiences for existing guests
- Attract locals by developing social activities
Here are some ideas on how to go through those steps and work towards increase your reputation and revenue
1. Partner up with startups looking for real estate space
There are many companies/ startups looking for physical spaces where they can serve their clients. Most of the time, the audience fits pretty well into a hostel’s social environment. Additionally, given the importance of location, hostels are also well-positioned at the city-centre or close to a train station and public transportation. And you’ve already got the facilities needed: Wi-Fi, printer, luggage room, multiple lounge area, fire safety, licenses, etc. Our staff who are available are multilingual and used to dealing with internal guests, so there’s no need for extra training. Always look for reliable partners, check reviews on online forums and judge if it’ll really be a plus for your Hostel or if it’s just giving you unnecessary extra work.
Some ideas of startup-hostel collaborations below.
“It’s a key management system that allows BnB guests to deposit or withdraw keys on their properties partners. In exchange, they pay you a small commission for every transaction. Basically, it is a check-in/check-out service for BnB properties located near you.” — KEYNEST
“Luggage storage network that connects travellers with Hotels and stores, where they can keep their luggage safe while they explore the city, or just wait for the next flight. The user pays a fee to use this service and you receive a commission. Each bag is insured by the platform.”— STASHER
“Self-service delivery program for items purchased from Amazon. The customer can choose to have the package delivered to a locker near them. If they want to return the package the locker can be used to do so. You can apply here.” — AMAZON LOCKER
Startup that allows Hostels to offer their social areas as a co working/ co study space. The users book directly on the Wedesky website and it’s also possible to leave a review about the experience. It’s currently available only in Italy, but soon it’ll expand to other European countries. — WEDESKY
2. Work with local bars, restaurants and clubs
Night club promoters get a commission for every client they bring to the clubs, it’s a full-time job trying to increase their network and communicating what’s going on every night. If you establish a partnership directly with clubs in your city, you can easily recommend it to your guests and get this commission for yourself.
The same thing could work for restaurants: you could negotiate a percentage of what your guest spends at the restaurants for a fixed commission per person who you recommend it to.
Another way is to partner with a restaurant in your vicinity and add some dishes into your own menu. Let me explain — Imagine a scenario where you have a pizzeria or a hamburger restaurant just around the corner. You can add some pizzas or burgers to your own menu and when the guest orders it, you pass the order directly to the restaurants. You can negotiate the price and add a margin, even if you don’t have a restaurant on-premise, you can still offer this service and increase your revenue. The partnership must be established with reliable businesses because it’ll directly impact your reputation.
3. Upsell tours and experiences
Guests are always asking for walking tours and day-trip recommendations. The highest revenue opportunity here would be to create those experiences yourself and sell them to your existing audience online (Counter provides you with the tools to create, manage and upsell experience inventory in addition to your beds)
If you are unwilling to invest time into creating your own experiences, you could partner with local guides and tour operators, reselling their services and adding a commission. You can find the best companies on TripAdvisor and contact them directly, asking for a partnership. It’s also a good idea to go to their tours and experience them as a client, to ensure that it’ll fit well with your audience. Remember, guests will probably think of the tour as a service from your hostel. If it’s positive, it can bring you a happy customer. If the experience is negative, it can also affect your online reputation with a bad review. So it’s imperative you partner with people who share the same values in guest experiences.
4. Develop social activities to promote interaction between your guests and the local community
Social activities (think beer pong and movie nights) are not something that you easily find in neighbourhood bars. The niche is relatively small; someone needs to organise, communicate and run it, which becomes exhaustive. However, hostel guests expect this kind of service. Once you already do it for your guests, why not invite external guests or locals to join?
It could be fun to spend a night out with friends, playing games and socialising. It’ll probably increase your bar sales and create a better atmosphere and experience for your guests. Language exchange games is a fun activity to integrate your internal and external guests. This type of entertainment is suitable for big and small groups. Pub Quiz / Trivia night is another good example, you could mix up big teams in order to promote interactions.
5. Retool your services to attract locals as well
Let the neighbourhood and the local community be aware of all your services. Maybe if you are located near universities or student houses, you could try to advertise your social area and bar as a place to study/work, offering a print service is also an advantage. How about long term stays or a co-living floor?
If you have a laundry service, offer it to external customers too. It’s way more attractive to wait for your clothes to be washed at a hostel, rather than at traditional laundry business!
Remember that all these ideas must be implemented with caution. Maybe some external customer is just using your print service but he/she realises that you also have a bar with activities, and that’s how you catch their attention, making them come back for more. Thank you so much for making it this far. If you want to share your experiences or have any questions on how you can use Counter to put this strategy into practice, just drop us an email. We’d be happy to have a chat :)
