Starting a Hostel Business

You want to take advantage of the growing popularity of hostels, but you don't know how exactly you'll accomplish that. No problem, because we have prepared this article with you in mind.

With this, you can easily and quickly get your hostel business up and running in no time.

hostel business

Hostels are becoming increasingly popular among tourists and travelers because, with the economic turmoil that the world is going through, a cheaper alternative to hotel accommodations is needed. You can take advantage of this by opening up your own hostel business.

You need to set up some things to get your hostel business up and running.

Licensing your Hostel Business

Since they cater to people, hostel owners need to get themselves licensed. Go to your local food and safety government agencies and get yourself certified.

Location Selection for Your Hostel Business

This is very important while setting up this business: find a place visible from the highways / main roads and cheap. To keep costs low in the rising competition, you must set this business with a low investment. Plan your project accordingly; start with Phase-I, where you invest only 35-40% of your investment and get your business started and running. You can develop Phase II and Phase III later to allow you to filter your mistakes and invest your money ideally.

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Security Lockers

Hostels can be called small hotels. They act almost like hotels except that some accommodations afforded to hotel guests are removed. This includes security for your things. In a hostel, guests only have security lockers for their things. When starting your hostel business, get only the best security lockers for your guests, or your reputation could suffer if one of your guests successfully raids the others’ lockers and get away with it.

Amenities for Hostel Business

Decide first if you want to use double-deck or single-deck beds for your rooms or a combination. You would also need to address the privacy of your guests because hostel guests are like bed spacers; they share one room. Unlike hotels, TV sets in hostel rooms are not encouraged to foster more interaction between guests.

Internet Access

Internet access can be wifi or landline-based, so your guests can connect with their loved ones in their home countries. Some might bring their laptops, but others will most likely be restricted to the PCs you provide. Make sure they can download and send pictures from their digital cameras if they wish to.


Most of your guests will be tourists and want to tour around the city they are staying at. To help them and ensure their safety, be ready to provide maps that can guide them around the city. The maps should be free. If you can, link up with a tour guide agency through which you can offer them a tour of the city.

The Best Staff for Hostel Business

The thing in common with hotels and hostels is their reputation hinges on the staff serving their establishments. The same goes for your business. You need to do the best there is in staffing. The staff should be friendly, helpful, and with an eye for cleanliness and organization. Having these will help boost the reputation of your business significantly.

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  • Leanne said on February 5, 2009
    This is a really informative site. I like that you have covered the basics, but these are the important basics. Have you started up your own business? If so, how did you go about this? Did you need a lot of funding to get started?
  • Jim said on May 20, 2009
    Looking to know if you have some information with regard to setting up a hostel in Buenos Aires. Re. insurance, licensing, reservation systems and budget
  • john said on June 5, 2009
    I think the most important information is - finance? How can it be obtained because there are a lot of setup costs involved and if you wish to run a top hostel in a good location it costs money !!
  • josh said on June 23, 2009
    Would you mind posting your responses to the questions above. I have the same ones. (Or you can just email to me.) Thanks. Great site.
  • Angie said on August 24, 2009
    Do you know of anyone who has applied and received a grant for opening a hostel? Also do you have any information on the startup cost for a hostel? I think this is a great way to offset hotel expenses for those on a budget who like to travel frequently.
  • well duh said on August 30, 2009
    who ever wrote this is clearly a genius! how about providing more information apart from the obvious basics
  • JOHN NKUNDLANDE said on September 28, 2009
    i'm very much interested in hostel business opportunity for tourists arriving for 2010 world cup and beyond.
  • Daniele Colombo said on November 12, 2009
    I'm looking for investors. I already have a hostel and now we are expanding. Contact me for serious offers. Daniele Colombo
  • skha said on November 16, 2009
    i have 3 bedroom en-suit house and 2 separate self contained houses in a yard measuring 1600 square meters, its located in the northern part of Botswana, in a village called tati siding which is 25 kms from Francis town, the second city of the country. Francis town is 540 km from the capital city Gaborone. The village is located along the main highway which runs from Capital city (Gaborone) to Francistown then Bulawayo(Zimbabwe) and livington(Zambia). Please help with ideas on how i can best utilize the facility.
  • Lusekelo Philemon said on March 4, 2010
    I want to come up with a Students' Hostel business, in Ipinda Township, Kyela district, Mbeya Region, Tanzania. The township has three secondary schools, without any one hostel around.
  • megan said on April 22, 2010
    when a hostel is started up for a secondary school what contracts r students meant to sign are there even any??
  • Ama said on May 11, 2010
    i am a fresh graduate from Abia state in Nigeria. i would like to invest in this hostel business but i will like to know more about the managerial aspect
  • Drew said on June 8, 2010
    SKHA, please contact me with information regarding your situation. I would love to assist, and throw some ideas around.
  • John said on June 30, 2010
    This information is very basic and common have stated obvious things that anyone who has backpacked knows. I'm looking for more detailed information like what kind of licenses do i need, what regulations are there, my rights as a hostel owner etc. Can you provide this information or direct me where i can get this information in Australia.
  • samson said on July 1, 2010
    Hi. very valuable info. but the type of hostel biz I am interested in is the student hostel. could you give me a more detailed biz. plan and hints to help. Student accommodation is a big problem in my area. thanks. Lagos, Nigeria.
  • vaibhav kumar said on July 30, 2010
    hi this is vaibhav kumar from dehradun i want to setup a hostel in dehradun itself. but i dont have adequate funds to start a hostel i need 10-15 lakhs please help me with ideas
  • Jas said on August 1, 2010
    I live in a small town. But we have homeless people just like anywhere else. What do I need to do to get one started? We have many Koreans, and philipenos that moved to our small town.. so that leaves people that have been living here all their lifes without a roof over their heads. The mayor don't seem to care about that fact.. I called him one day and his reply was.. well if they want to live here they have to stay with family or friends. What if there is no family or friends left??? Shouldn't the mayor.. who has decided that 3,000 foreigners moving here is fine! but their own kind needs to live on the streets SUPPLY A HOME! for a hostel or something?
  • Patrick Mviha said on August 5, 2010
    I am trying to set up a student hostel accommodation and would be interested advice on don'ts and dos. I also need some help on developing a hostel business plan. Please assist
  • Lalu Bashel said on August 24, 2010
    I want to start hostel for the college goers and I don't have the idea as I don't have money. Please advise me with financial support.
  • yann said on August 28, 2010
    Big Island, Hawaii, Kapaau 96755. Hostels rules and regulation as far as construction/renovation, sanitation, health compliance etc...
  • robert said on August 29, 2010
    people, many of you act like a bunch of buffoons. how on earth one can know all rules and regulations which are different from country to country? In some European countries you don't need special license nor insurances. Just a registered firm. You just need to rent/own a flat big enough to host guests. In some countries you may run a hostel in resident building - Bulgaria, Romania, Croatia, Serbia, Hungary etc. So do some research and you'll find answers. The best start is if you have own property.
  • robert said on August 29, 2010
    anyhow, if any of you have interesting property on a good location (excluding Africa) I may be possible investor or business partner. I never ran a hostel before but I've been in hundreds of them, and thinking of starting my own. I did some research for European continent where I live, but I am open to other areas, especially USA where I traveled and where I am familiar with the situation. mail:
  • Vimal said on September 5, 2010
    Hi, I can get a 3 storyed building with 1500 sq feet each floor for Rs.35,000/- in kochi, kerala, India. It is 2 km away from National highway. Each floor has 3 bedrooms with attached bathrooms a common hall and a common kitchen. I am planning to start either a hostel or as a guest house for different visiting guests for companies. Kindly guide me which one-hostel/guest house would be a better option? Please guide me on the start ups also.
  • Mpho Meje Theophilus said on December 2, 2010
    Hi, I am interested in hostel businesses that are currently unavailable, where I live there are 2 higher learning universities and accommodation is very scarcer and difficult to find which resorted majority of students to rent for private property flats @ unreasonable monthly pricing. I have business ideas and plans intact which many also assists in starting such a business venture. As of any assistance for starting the business that will generate a profitable turnover of income I also guarantee possible investors that it is "a not to miss opportunity in investing".
  • swapna said on December 25, 2010
    I Want to Start A new Business of Ladies Students Hostel, Please Let me know the ideas of building a business and how to invest, procedures with limited capital.
  • Lloyd Jones said on January 7, 2011
    We started a network of hostels across Canada 20 years ago, including colleges universities and private hostels. And we need more across canada I have a hostel of our own in rural Ontario. Zoning is important, location and city town are location. Is it a place where backpacjkers want to/ should go. Also think about the off-[season (ie winter) when backpackers stop traveling. Residence for students is the alternative for the winter. Anyone who wants to start a hostel be free to email me. Lloyd
  • rich kullander said on February 4, 2011
    Providence RI USA. Hi folks, I am VERY interested in opening a Hostel or 2 in the Great State of RI in the next 2 years. I have read several questions about financing and business plans and I have the same questions. My credit is awful thanks to a layoff (2 years). I am currently working on a masters degree and once that is finished I really want to give this a go. I realize that I need to research the state and town rules but the financial part is where I am lost. Where do I start? How do 'investors" get compensated? Do I have to consider partners? Help!
  • Gloria said on February 23, 2011
    Hello there, i would like to start up a hostel renting business in Kigali City- Rwanda. So may i have some ideas on how i can go about it-Business plan that can assist me in accessing financial assistance. Thank you so much.
  • mofenyi mpusang said on March 15, 2011
    I want to start up a hostel business for university students in Botswana,Gaborone
  • Naa said on March 15, 2011
    I am in Ghana and want to start a hostel business. i have acquired land close to a university campus. i need to know how to start. i do not have the initial capital
  • Valerie said on April 4, 2011
    Great basic information, but could you email me with the foundational stuff, i.e. what kind of property do I need to invest in (commercial/residential)? How do I go about getting funded? What kinds of licenses do i need to obtain in order to run a hostel that has a cafe? I am looking in the Portland, Oregon area. Any response would be greatly appreciated. Thank you!
  • Nana Yaw Korsah said on April 12, 2011
    Wondering why emphasis wasn't laid also on the health and safety requirements for hostel establishment as it influences largely the well being of the tenant (student)
  • sai said on April 16, 2011
    Hi, I got very useful informations form this site, just now i have started womens hostel in chennai, Tamil Nadu, India. and let me know the procedures to get the license to run the hostel Please
  • Benjamin said on April 27, 2011
    I would like to open a few hostels in the NYC area. Westchester County would be good and so would Connecticut. Can anyone send me some tips on what I need to do. Thanks so much.
  • Shezi said on May 16, 2011
    Hi there. This hostel business is very interesting. I am based in Durban, Kwa-Zulu Natal, South Africa. I have located 3 properties/houses with 5/6 bedrooms that can be used as hostels or for student accommodation. They are literally 5min walk from a busy street infamously known for its entertainment and euphoric lifestyle. To add to that premises are based in a suburb area, where there are two shopping malls, 9 restaurants, 4 nightclubs, and 2major universities 2-10min drive. Some of these properties are owned by banks and others by Property Groups. Now as i am only 25yrs old, with no surety, nor finance but the general know how of running and maintaining a building, how do i go about securing finance to purchase these buildings? I have researched the general cost per building and cost to run and maintain them. May you please provide me with a detailed business plan for such a venture as i believe what i have is a sure deal. Your response will be appreciated.
  • S.S. Tanwar said on May 30, 2011
    I want to have a hostel business in Durgapur, West Bengal, India. Suggest me more point to help me to open this business.
  • Rayz Alix said on June 7, 2011
    Hi! I would like to set up a student hostel accommodation at Kota Bharu, Kelantan, Malaysia. Really need your suggestion on developing a hostel business plan and tips to make it successful.
  • nana said on June 13, 2011
  • emmanuel manu-kumi said on June 29, 2011
    i have acquired a land and have started the platform of 25exercutive rooms near university of ghana and closer to Wisconsin university.i need a partner or international funding to finish this project.
  • Ally Othman said on October 15, 2011
    Hi there, I own Girls hostel in Dar es Salaam. I am looking for business partners to turn the hostel to budget travelers hostels and Backpackers. Please contact me: if you are interested to do business
  • shankar said on October 24, 2011
    hi, i have men's as well women's hostels separately for students in kakinada,andhra pradesh. plz give me some suggestions to get the license, investment, and expansion procedures. i want to become a professional in hostel business. plz... plz...
  • Lillianne Chovenye said on October 28, 2011
    I have land 15 acres and i want to establish a university hostel business. I really do not know how to start plz assist
  • AJAY said on November 26, 2011
  • Raju Akaram Patil said on November 29, 2011
    Sir, I have a 10 Rooms at Maharashtra in Sangli. I want to start hostel for students. Please guide me how I can apply for license.
  • k.mohan said on December 11, 2011
  • P. Sriramulu said on December 16, 2011
    My building construction for the working women hostel near Tambaram is almost finishing stage. Now I need to apply license to start the ladies hostel. It would be highly appreciated if anyone can help me. Who is the licensing authority and to whom I have to apply the license. Also I need what are the formalities to be followed. My telephone number is 7299114156/ 9710602018
  • Zareef said on December 19, 2011
    I want to make Student Hostel. And I want to see the designs or plans for student hostel. Please tell me the free websites from I can get some design or plan ideas.
  • Vince said on December 29, 2011
    I have a house in San juan del Sur ,Nicaragua and I am trying to convert it into a hostel or a bed and breakfast how do i go about advertising
  • hilton siatontola said on January 5, 2012
    I want start a hostel business and I need your help. Am from lusaka,zambia,africa.
  • Bala said on January 9, 2012
    I need to start a Women's Hostel in Chennai, Tamilnadu, India, What is the procedure and clearances need to fulfilled. Chennai, Tamilnadu, India
  • vibhor jain said on January 16, 2012
    want to start a hostel in Moradabad in west U.P .Area available is 140 sq. meter .Please help me in developing a floor plan for 20 students.What precautions i should have to take while developing it.
  • Gurupreet said on January 18, 2012
    Please send the designs of single bed with attached study table for girls. We have completed hostel but require the latest designs to furnish the rooms etc. It is app.100 sq.ft of 18 rooms for 36 girls.
  • madhu said on February 13, 2012
    i am looking to running hostel or new independent building for hostel purpose in madhapur do u tell me the opportunities
  • Rosa said on February 16, 2012
    I am looking to start a backpacking guesthouse in Tanzania or Kenya (on the beach) but I cannot find much information about rent prices and profitability. Could anyone help me with this information?
  • jayshree said on March 8, 2012
    i have 4000sq ft of land in bhubaneswar, orissa, INDIA. I want to build a girls hostel(students) there. need help with plan n costing n loan....
  • ISAAC said on March 11, 2012
  • kalpana said on March 26, 2012
    I NEED INFORMATION AND LICENSE PROCEDURE TO START LADIES HOSTEL IN Lucknow IF ANY ONE HELP ME I WILL BE VERY Grateful..... i have 3000sqft open Land in very good location there are too many eng colleges and management institutes
  • MOHANRAJ said on April 2, 2012
    plan to construct post graduate students hostel near to engineering college in coimbatore (tamilnadu) to serve twenty pupil. Please advice in the aspects of permission to run the hostel and over all managing hostel activity in a better manner
  • Varun Yadav said on April 4, 2012
    Interested to start a hostel for engineering college students.
    Location - Aligarh, Uttar Pradesh, India
    Land - Opposite to Engg. college, 1600 sq. yard
    Please help with some good ideas for starting up. How to do the market survey before investing? What should be the important features to be incorporated? What are the legal formalities to be done? Please suggest.
  • Robert said on April 15, 2012
    We are opening our 2nd Puerto Rico Hostel Hotel on May 15, 2012. We are looking for Investors, Partners and Management Interns. We offer loans and financing for international hostel projects. Please contact me for more information. Robert Davis, Caribbean Vacation Rentals Tel: (786) 375-8909
  • lavanya said on April 30, 2012
    Interested to start a hostel in india (chennai). pl guide me in the investment & features to be incoporated. suggest me on the same.
  • dhakshanthra said on May 17, 2012
    am interested to start a hostel business in chennai, i dont have a house of my own; can i start it in rented duplex house. help me with that.
  • Smruti Sagar Swain said on May 17, 2012
    Am interested to start a village curettage, near to Puri, Orissa, India only for foreigner. Every type of accommodation I will provide their. so, how can I will get my customer.
  • Srikanta said on May 25, 2012
    we have already a hostel in Berhampur, Ganjam, Odisha of India. But now are shifting our hostel to a lonely place far from town. So i want to know how can we start our hostel newly there such in a lonely place. Anyway we have to move. So what we should do, what will be the safety things to follow there. I need some advise. Please. Kind Regards, Srikanta/ Berhampur/ Ganjam/ Odisha/ India
  • Marina said on June 6, 2012
    Hey everybody! I'd love to set up hostels throughout China, starting with Tianjin (天津). I need a sponsor. If anyone's interested, let me know at
  • bjairaj said on June 18, 2012
    I am interested to start ladies hostel near hitech city hyderabad andhra pradesh india please suggest how to with it
  • monisha naidu said on June 20, 2012
    hi, i'm monisha working in a private concern my long term goal is to start a play school or GIRLS HOSTEL wit hi tech facility like pick and drop for students and very good security persons and very helpful staffs who will be available 24\7 for the students and ladies. As i don't have enough funds pls help me wit required info like how to get funds and where can i start in chennai and how much will be the entire project value as a brief mail so that it will be helpful for me to settle in life ...thank you ans waiting for ur response plsssss..
  • suhas said on July 22, 2012
    Hi I am suhas stay in pune Talegaon dhabhade I would like to start New girl hostel business.
  • bridgit said on July 22, 2012
    hi every body i am running a guesthouse in bangalore in india i started this from my home now i have taken one house and running this it is for short and long term guests with bed and breakfast. thanks bridgit
  • vikash kumar sharma said on July 24, 2012
    i want to open a shop of laptops,tablet,mobiles,computer accessories and mobile accessories etc. i am from patna, bihar in india. what should be the land or minimum investment for this business. how shall i contact direct with companies like samsung, nokia, apple, lg, sony .give the information about these companies. i want to earn monthly income of 300000 rs from this shop.
  • vikash kumar sharma said on July 24, 2012
    what is the process of making license of a shop or a company in bihar. which type of license would be required for a shop of computers and mobiles in bihar state of india.
  • zamu said on August 3, 2012
    Hi. I have a land in Kenya near the university and i am having a plan to start a hostel, i am not capable financially please can you guide me how i can get a capital to start with. Thanks
  • tammy said on August 4, 2012
    hi I'm in west Texas we are going through a big oil boom causing for no housing people here working but no were to live is this something that could be done in this area ? what would i need to get started?
  • Ramsay said on September 14, 2012
    Hi there, I just secured a property around Victoria Falls in Livingstone Zambia and I would like to start a Backpackers Lodge Now looking for a Partner if you interested please email me on
  • patriciah kyambo said on September 15, 2012
    hi i'm from kenya and would like to start a students hostel in the eastern side of kenya. how much capital do i need?
  • Joyce said on September 20, 2012
    I'm a woman of great business ideas but not only with the ideas, I'm practicing it. I'm very good in how to market my products. Now I want to enter into a new venture with my uncle who is retiring from active service as a chef in many top class hotels in Ghana. We want partners to be able to turn this into reality.
  • Joyce said on September 20, 2012
    Now my business is in Accra Ghana but want to relocate to Takoradi in western region of Ghana were there is oil exploration.
  • neema wilson madulu said on September 24, 2012
    The business will be in East Africa. Tanzania in Mwanza -Nyegezi near sent Augustine University any one interested please contact me Tel: 255-0785-578-555.
  • nusrat jahan said on September 25, 2012
    I want to do hostel business in canada. now I have 6 hostel in dhaka Bangladesh. I have 8 years experience.
  • valter said on September 29, 2012
    how can I start my own hostel business in london, england
  • Gerald Wandago said on October 24, 2012
    I'm a Kenyan and is looking for serious investors in hostel industry. I'm ready to do all the ground including logistics and all the paper work including acquiring land. Any foreign investor interested to email me.
  • portia said on November 5, 2012
    I would like to buy an abandon house and turn it into a boarding house with at least 4 two rooms outside. Where do I go for loans or funds. Please help
  • Womba said on November 13, 2012
    Hi, i have a 5 acre piece of land in lusaka zambia. I would like to put up student hostels, pls advise on how and where i can get financial assistance or an investor.
  • Gaelale Jani said on November 21, 2012
    I'm motswana having commercial plot in Maun for shopping complex right in the middle of the village. Can change the use is 40m by 53 metres. Join me to be my partner or buy it or any idea on how to develop it. Hope to hear from people from different nations. THNX
  • Victoria Nerey Riwa said on November 23, 2012
    I'm Victoria Nerey Riwa from Arusha Tanzania having commercial plot in Moshi Kilimanjaro for Hostel Near KCMC Hospital . Can change the use is 17m by 40 metres. Join me to be my partner or any idea on how to develop it. Hope to hear from people from different nations.
  • S. Bala said on November 28, 2012
    I have a house at Poonamallee, Chennai. I want to convert into hostel. Give me some ideas to convert. Can I get any loan for this conversion. If yes please let me know the details
  • subhash said on December 9, 2012
    i have a house at wardha in maharashtra. i want to convert it to hostel and mess for collage girls. can i convert and is there any rules pl. give me guidance in details.
  • sekhar said on December 18, 2012
    I am interested in starting a hostel in Chennai (India). Please guide me in the investment & features to be incorporated and the legal procedures for starting the same.
  • parag aochar said on January 5, 2013
    i have interest in starting a girls hostel in akola(maha) india. i have purchase 3000sq/fit land for contraction please give me guideline what to do?
  • rash said on January 27, 2013
    hi, i want to start a baking biz from home. Can anyone help find a reasonable baking course classes in south Mumbai. Also if anyone can provide me with some helpful tips on how to start a home baking biz. your help would be greatly appreciated. pls e-mail me
  • K.Ramakrishnan said on February 6, 2013
    Dear sir, We are functioning a trust. We want to start a ladies hostel in Thisaiyanvilai Radhapuram taluk, thirunelveli district in Tamilnadu state in India. Our trust name is Rural power. Kindly give us your guidance to start a ladies hotel in our area. thanking you, Yours sincerely, K.Ramakirushanan.
  • SAROJA JOHNSON said on February 7, 2013
    I am trying to set up a women's hostel accommodation in the upstire building of my house which is situated at Marthandam, Kanyakumari dt, Tamilnadu on N H road Trivandrum to Nagercoil and would be interested advice on dos and don's. I want to know the procedures to get the license to run the hostel. Please suggest.
  • umesh kapoor said on February 18, 2013
    I am interested in jaipur for hostel or guest house. I am ready to purchase accommodation.
  • Dhanasekaran P said on February 20, 2013
    I have started a Ladies Hostel at Chennai. It can accommodate 60 and full infrastructure. I want to Lease it out. Anybody interested may contact me at +919884029328
  • Raj said on March 6, 2013
    If Anybody interested in Hostel biz may contact me at +918791624225. I have a nice beautiful Flat fully furnished to open a Hostel, very nice Area and have all basic facilities, and very near to S N Medical College and 50 meters from main M G Road, in Agra, India. I want to sell it immediately.
  • richard said on March 10, 2013
    I am urgently in need of a business plan on how to start a Guesthouse business in little but tourist attracting town called Opuwo in Namibia . It would be very helpful if you can send me plans of types guesthouses one can find our the world. Thanks ,waiting urgently. Yours , Mr Richard Tjazapi
  • Naveen Victor said on March 18, 2013
    INDIA, KERALA, ERNAKULAM, Kalamassery. Good day, I am interested in opening a hostel business for students. Please advice some floor plans and other important details which have to be thought about. The plot size is about 6.5 cents = 2831 sqft Almost a square shape, slightly more in length. awaiting yours, Naveen
  • Mussa Juma Ally said on March 27, 2013
    I am interested in starting a lady university collages students hostel in Mbeya (Tanzania). Please guide me in the. investment & features to be incorporated and the legal procedures for starting a ladies hotel in our area. thanking you, Yours sincerely, Mussa Juma Ally
  • ahmed aman ali said on April 1, 2013
    i have a wonderful place for build a guest house for 50 years. near beach side in the maldives clean fresh sea water and the white sand beaches this is the paradise of the world sunny side; to contact us +9607741141 call any time
  • Hemraj said on April 2, 2013
    Hi, I live in chennai and I'm looking to start a new Ladies hostel in and around OMR road to attract the IT crowd. Now I'm looking for an individual house or apartment for hostel purpose. If anyone has the same please contact me to my mobile - +91 9840860896


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