Hostel Size Pre-Opening

Location, Location, Locations

Dennis Pitcock
Written by Dennis Pitcock

locloclocLocation matters when it comes to hostels. You can get guests coming for based of the location alone, even if the hostel is poorly ran. If you are looking to start a hostel or expand to a new location, determining a location should be decided with care. Is it close to a bus station? Train station? Subway stop? Tourist attraction? Hip nightlife area? All of these locations are desirable, in any city, but sometimes you have to decide between. Here are some pointers you should consider before you sign the papers.

Location as a First Impression

A hostel’s location serves as its first impression to potential guests. Many guests search on location alone, checking Google maps or searching by district on an OTA. They are introduced to your hostel, before they go on and look at your pictures and read your content and reviews. So if you place yourself in the right area, you’re likely to get more bookings. This also applies to hostels that are easy to get to upon arrival to the city such as those close to a metro, bus, or train station. Finding their hostel easily sets the guest at ease before they even walk in through your door.

Be Part of an Ecosystem

Guests don’t trust taxis and hesitate to take public transit in fears of getting lost. A good hostel location creates an ecosystem urges guests to lengthen their stays. It is beneficial to guests if a hostel is within a walking distance from a market or grocery store, beer or liquor store if you don’t have a bar, pharmacy, a major attraction, and at least a couple cool bars if you don’t have your own. Few locations are that perfect to offer all these options, so pick and choose what is important to you. The more of these options are near your location, the more comfortable your guest will be.

A Good Location Increases Ratings

Guests have no problem leaving bad reviews, and honest reviews for hostels that are in bad locations. Even if the location is good, the neighbors and surroundings could diminish their value. Loud nightclubs, dark streets, poor sanitation can all negatively impact a good location. These issues can be resolved, but sometimes it is easier to pick another location from the start. You’re fighting an uphill battle if your location is not great. The more inconvenient your location is, the more you’ll have to compensate to keep the guests happy. Even then, you’ll still likely score low on the ratings for location.

Do the Math

What prices do the good location hostels charge? What is their occupancy? How much more money can you make? Could the investment produce enough returns with the higher rent or mortgage price? In the best locations, you can expect to pay a higher price, and you could find yourself placing competing with offers from hotels. Don’t be discouraged. A good hostel owner can take just about any small and mid sized hotel in a good location, and fill it with dorm beds and make even better margins. That good location will offer a higher yield and is well worth the investment. Even if the location is out of your budget, look towards up-and-coming locations where you can get locked into a good deal now and eventually you’ll be where both you and your guests want.

About the author

Dennis Pitcock

Dennis Pitcock

Dennis jumped into the hostel industry after a summer backpacking Europe in 2008. He went from being a guest to a manager within weeks, and currently does consulting for large and small hostels alike in 3 continents. Prior, he worked in eCommerce, so he has passion for the tech side of the industry and is now deeply entrenched in the hostel and activities industry.

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