Location matters when it comes to hostels. You can attract guests based on the location alone, even if the hostel is poorly run. If you are looking to start a hostel or expand to a new location, choosing your location should be done 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 them. Here are some pointers to 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 based solely on location, checking Google Maps or searching by district on an OTA. They are introduced to your hostel before moving on to look at your pictures, read your content, and check your reviews. If you position yourself in the right area, you’re likely to get more bookings. This also applies to hostels that are easy to reach upon arrival in the city, such as those close to a metro, bus, or train station. Being easily accessible sets the guest at ease before they even walk in your door.
Be Part of an Ecosystem
Guests don’t trust taxis and often hesitate to take public transit for fear of getting lost. A good hostel location creates an ecosystem that encourages guests to lengthen their stays. It is beneficial for a hostel to be within walking distance of a market or grocery store, a beer or liquor store if you don’t have a bar, a pharmacy, a major attraction, and at least a couple of cool bars if you don’t have your own. Few locations are perfect enough to offer all these options, so pick and choose what is important to you. The more options that are near your location, the more comfortable your guests will be.
A Good Location Increases Ratings
Guests have no problem leaving negative reviews for hostels that are in bad locations. Even if the location itself is good, neighbors and surroundings could diminish its value. Loud nightclubs, dark streets, and poor sanitation can all negatively impact a good location. These issues can sometimes be resolved, but it may be easier to choose 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 your guests happy. Even then, you’ll likely still score low on ratings for location.
Do the Math
What prices do hostels in good locations charge? What is their occupancy rate? 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 premium, and you might find yourself competing with offers from hotels. Don’t be discouraged. A good hostel owner can transform almost any small to mid-sized hotel in a prime location into a bustling dormitory that generates better margins. That good location will offer a higher yield and is well worth the investment. Even if the ideal location is out of your budget, consider up-and-coming areas where you can secure a good deal now, and eventually, you’ll be in a place both you and your guests will love.