Running a small hotel

[dkujsbap]

Having traveled a lot of the world and with zero ties, as I approach my 30th birthday I want something new. I'm bored of London.

I have stayed in enough hostels and guesthouses to know what works and what doesn't.

I want to take my £150k and set up a hostel (not the typical backpacker one but more boutique-y aimed at couples).

Problem is, as we all know, pretty much most places are in a property bubble, and there are additional costs of hiring foreign lawyers etc and of course, loading up on foreign debt.

Is this another "Bulgaria moment" or can anyone perhaps provide some insight on bubbles and business mortgages around Europe?

Obviously not looking at the Paris, Barcelonas as that's just like London. Think Seville, Valencia, Genoa. 

Reckon a place big enough for 8-10 rooms is going to set me back at least what, 1.5m euro? Or would it be a commercial lease and again, any info is appreciated to help me do the numbers.

P.S. Please feel free to talk me out of my midlife crisis...

[GeordieAndy]

I recently stayed at an amazingly located and well run hostel in Barcelona for €6 per night INCLUDING a basic continental breakfast which admittedly was in the cheapest mixed dorms they had but it was cleaned every day and had good secure storage etc. These days with air b&b I would suspect it would be very hard to come up with something aimed only at couples that is better than what you can rent direct with them or via existing private rooms within hostels but happy to be convinced.

[dkujsbap]

1 hour ago, GeordieAndy said:

I recently stayed at an amazingly located and well run hostel in Barcelona for €6 per night INCLUDING a basic continental breakfast which admittedly was in the cheapest mixed dorms they had but it was cleaned every day and had good secure storage etc. These days with air b&b I would suspect it would be very hard to come up with something aimed only at couples that is better than what you can rent direct with them or via existing private rooms within hostels but happy to be convinced.

Wow. That's ridiculous. Do you mind telling me which one as I have been meaning to go back to Barcelona!

I wouldn't necessarily cater only to couples, but I wouldn't exactly be running a party hostel. Maybe more like a hotel with a common area, with one or two dorms for single travelers and friends. 

Personally I don't think AirBnB can offer the same (although you're correct about competition) type of stay: socialising and advice on the locality.

Anyway, this is why I would be wanting to avoid the likes of Barcelona. It's far too saturated and actually, people have been there now. People are tending to explore off the beaten track a little bit, hence the current popularity of places like Morocco, Croatia and Iceland! Although I'm noticing a trend in "second and third" cities.

 

Anyway, I am mostly wondering if the entire world is in a bubble right now

[GeordieAndy]

Yes sure - https://www.st-christophers.co.uk/hostels which I found via http://www.hostelworld.com/ but after reading the reviews on there I realised the free breakfast offer was only when booking direct.

The main common area in the above Barcelona one was a sports bar so other people came in and having stayed in probably 40+ hostels around the World over many years (95% as a couple) I couldn't fault it and crucially for me the free WiFi was 10/10 too.

Also not trying to be difficult but every hostel I have ever stayed in has offered me socialising opportunities and advice on the locality so just not sure what your USP will be as there are places on www.hostelworld.com everywhere I have every wanted to visit both on and off the beaten track?

 

 

 

[JoeDavola]

I went through a period of wanting to set up a hostel because I figured I could set up a much better one for pretty much the same outlay that most people were spending, if I built some sort of privacy pod like this:

I had all sorts of little designs sketched out. However I researched it an apparently owning a hostel is like owning a coffee shop; lots of people see it as a dream business, but the reality is that it's an absolute ******* to turn a decent profit.

[dougless]

I think the failure rate for small hotel type businesses is similar to small restaurants but more drawn out. Unless you really want to work your socks off and take an enormous risk with your capital I would avoid hotels/catering like the plague.

[dkujsbap]

On 15/12/2016 at 7:45 AM, dougless said:

I think the failure rate for small hotel type businesses is similar to small restaurants but more drawn out. Unless you really want to work your socks off and take an enormous risk with your capital I would avoid hotels/catering like the plague.

Exactly the reason for my hesitation. Having said that, and I realise people like to embellish and make themselves look better, I've met three different hostel owners (all in south America) that are now building additional ones.

Maybe Europe is totally saturated. This continent is nowhere near, everywhere has been pretty full even in August. Oh well. Back to the day job for now.

[Peter Hun]

Blackpool is a cheap destination to buy a guest house. Falling prices and impossible sell, if you want to lose your shirt it might be easier to do it in the UK.

[John51]

Hotels in Blackpool can be as low as £10k per bedroom if there is no car parking space. Some state cash to be had housing the homeless if you've the stomach for it.

[gibbon]

Running a hostel sounds like hell on earth but each to their own. Think you'd struggle to specifically target couples. When people think hostels they think cheap, simple, little privacy. Not exactly what couples would want. Just like people going to McDonalds didn't want salads.

Maybe you'd be better off with a guesthouse? Wouldn't have to take out some jumbo commercial mortgage either.

[ExiledMatty]

At many times of the year I virtually live in hostels, particularly during my annual migration to the antipodes.

Taking NZ as an example. I am increasingly seeing more and more older couples staying in hostels, even shared some dorms with them too.

Most prefer hostels as they are cheaper than motels and B&Bs, but the main thing is the common areas. Being able to cook in a country thats super expensive to eat out in is a winner.

Hostels are also very sociable too, particularly in NZ where you have a wide range of ages and nationalities.

I have always dreamed of opening a hostel and would absolutely target all age groups, singles and couples too, particularly in a place where dining out is expensive.

The kicker is that a hostel will live or die by it's location. Good locations cost. If you can crack it though, running a hostel need not be a full time job. There are plenty of young people willing to work in exchange for a dorm bed.