Starting a Hostel Business

As an Association of Independent Hostel Owners, our main activity is to offer services to our members.  We do get enquiries from people who are thinking of opening a hostel but are not really able to offer detailed information on how to open a Hostel because the options are so very varied! 

Each one of our members is unique and runs their hostel their own way.  Owning and running a Hostel is often a lifestyle choice.  Many of our members businesses include campsites, food and drink, activity centres and tours etc etc as well as different types of Hostel Accommodation so it is very much a personal choice.  We also have members hostels which are run by the community or are social enterprises.  However, whatever type of business structure is intended, a few basic principles apply so here a few suggestions worth considering:

If you are thinking of building a hostel or converting an existing building, perhaps the first step is get in touch with the planning authority in your preferred area to see what the opportunity is to start a hostel within the planning laws of that district. 

Whether you are buying an existing hostel or starting a new one, get in touch with your local Business Gateway which provides lots of useful information on starting a business. It will help ensure you have covered everything to think about in running a business.  In particular, consider if there is a market for what you are proposing.

If you are hoping to attract backpackers, be aware that there is a fairly established route which tends to be Edinburgh /Pitlochry /Inverness /Skye/ Glasgow.  If you are considering opening a backpackers hostel where there isn’t one at the moment its probably because backpackers tend not to go there!

Backpackers from abroad tend to go for the very scenic and remote areas; often they like hiking, outdoor sports etc, combined with a big city experience. 

Many of our hostels cater for older couples, families etc who are simply looking for an affordable break or who enjoy the outdoors - attracting people from the UK as well as abroad.

City Hostels can cater for a range of markets from backpackers and families, to weddings, stag and hen parties, students and even workers looking for cheap accommodation.

We recommend you go hostelling as part of your market research!

In terms of general trends, our members seem to be doing well and are benefitting from offering good value accommodation at a time when people are being careful with their expenditure.  A good hostel provides a very personal service with high quality of shared facilities such as kitchen, dining, living areas as well as drying rooms, equipment storage.  The major change in shared facilities is in sleeping accommodation; people are looking for more privacy and hostels are tending to have smaller bunk rooms which might suit a family group, and also family rooms and double rooms.  Some hostels now offer ensuite.

Once you  have something specific in mind, contact Visit Scotland who provide a lot of information on the best way to set up a high quality hostel accommodation of the different types. 

Once you are well ahead with your plans and interested in joining SIH, we would be happy to circulate specific queries to our members, for example on equipment and facilities, and generally they are happy to share advice.