Students, a big group of friends travelling together on a budget and staying in youth hostels or dormitories in tourist destinations is not a new phenomenon. However, in the last couple of years a marked surge is being witnessed in this segment of travelers with fewer players in the industry to accommodate them. While it might seem very easy to just set up a youth hostel and open the doors to travelers, in actuality it requires a lot of meticulous planning.
Challenges to setting up a youth hostel/ dormitory:
Occupancy: Occupancy of a youth hostel can be sometimes erratic. If your property is near a tourist destination, you will witness a huge rush during peak season, but then during off-season you will have very less guests. So what do you do? Should you keep your hostel open only during the peak tourist season? Get answers to these questions, because you can then accordingly hire your support staff.
Handling guests: Handling guests coming to stay in a youth hostel/ dormitory requires more patience. Unless you have strict policies or guidelines, you might find yourself amidst ugly situations. Many entrepreneurs don’t enter this segment because of this issue.
Credentials of guests: It is a challenge that you will have to take head on. Keep a scanner-printer handy. Make sure your guidelines have a clause that guests need to carry a photo id when they check-in and adhere to it. Scan them, take a print and ask them to sign it.
Forming a company: This is perhaps the first step. Although setting up a business can be a little painful, but I would recommend some sort of a company setup. Although setting up a Pvt. Ltd. company is expensive, it can save you from various legal hassles. So, forming a Pvt. Ltd. company can be a good option.
Taxes: Unlike a homestay, you will not be able to be eligible for certain tax rebates offered by some states in India. So make sure that you are clear about the taxation rules for running a youth hostel/ dormitory.
So if at all the idea of setting up a youth hostel crosses your mind, here are some pointers to help you plan better:
1. LOCATION: The location of your hostel will have a direct bearing on how much guests you will get. Ideally, those closer to tourist destinations or premier institutions have better chances of doing good business.
2. SIZE: How big your property is or how many beds it will accommodate is another aspect that needs serious thinking. Just to accommodate more guests you can’t cramp the room with beds. You will have to ensure that each guest have some extent of privacy.
3. TARGET GUESTS: Who will you be targeting? Is it the mid-budget travelers or just backpackers you want to come? Or is it going to be an all women’s hostel? If you are looking at the mid-budget segment of travelers, then having a dormitory makes no senses. Instead based on room sizes, rooms with two/ three or even four beds with attached bathrooms can be the best option.
4. AMENITIES: Just because it’s a youth hostel/ dormitory, you should not expect guests to come and stay in some dirty or dingy place. Cleanliness should be like that of any good hotel. Pay more attention to the beds, the bedside tables and the lighting of the rooms. While the rooms should have enough light, there should be provisions of bedside lights, which a guest can use to read at night without disturbing the other guests. Make sure there is enough storage space for individual guests to keep their valuables. Provide them with a lock and key. Bathrooms make or break a deal. So it goes without saying that the bathrooms need to be clean and modern. Also there should be enough bathrooms based on the beds available.
5. AFFILIATION: Affiliation to a premier organisation like the Youth Hostels Association of India (YHAI) can be a good option. This will not only help you in getting guests, but will also help you in getting to know the quality you need to maintain.
6. DINING: Make sure that you have a proper dining area, big enough to accommodate your guests. You can have a strict policy of guests eating only in the dining area.
7. SUPPORT STAFF: The support staff will play a vital role in the running of a youth hostel/ dormitory. A front-office executive (if you are unable to devote time), a cook and a helper who will double up as a waiter in the dining area, and a couple of cleaning persons are must.
8. POLICIES: Make a list of the policies or guideline that you would like guests to follow. Is there a curfew timing, what is the maximum stay allowed, what are the check-in and checkout timings, etc. – these are the things you will need to keep in mind. Then what are the policies for smokers, on alcohol consumption, pet-owners?
Hope the article summarizes the issues you need to look at before setting up a youth hostel/ dormitory.
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