Travelers inside a modern hostel dorm room featuring private bunk bed pods, lockers, and a work area.

Starting a Hostel: Key Steps Before You Open Doors

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Licenses, Permits, Budgeting, and Pre-Launch Overview

Overview: Starting a Hostel

This business is a budget lodging concept built around shared spaces and, often, shared rooms. It usually combines dorm-style sleeping options with common areas like bathrooms, kitchens, and social spaces.

It is location-dependent and property-dependent. You will deal with real estate, life-safety rules, accessibility requirements, and local approvals before you ever welcome your first guest.

If you want a broader readiness checklist before you commit, review Points to Consider Before Starting Your Business.

Is This the Right Fit for You?

Start with your motivation. Ask yourself: “Are you moving toward something or running away from something?”

If you are starting only to escape a job or a financial bind, that pressure may not sustain you when the hard parts show up.

Next, check fit and passion. Decide if business ownership is right for you and if this specific business is the right fit.

Passion matters because it helps you push through problems. Without it, people often look for a way out instead of looking for solutions. Read How Passion Affects Your Business to pressure-test your “why.”

Now do the reality check. Are you ready for uncertain income, long hours, difficult tasks, fewer vacations, and full responsibility?

Is your family or support system on board? Do you have the skills now, or can you learn them, and do you have enough funding to start and operate?

This is also a good time to look at Business Inside Look so you understand what ownership really looks like day to day.

Learn From Owners You Will Not Compete Against

Talk to people who run this type of lodging business, but only when they are not direct competitors. Only talk to owners you will not be competing against.

Look in a different city, region, or market. You want honest answers without creating friction in your own backyard.

Here are a few smart questions to ask:

  • “What approvals or inspections surprised you before opening, and which office handled them?”
  • “What part of the building or layout cost more time to get approved than you expected?”
  • “What would you verify first if you were signing a lease again?”

Scale Reality Check: Small, Medium, Or Investor-Backed

This is not a typical “start from home” business. You need a compliant building, and that usually means bigger upfront commitments than many first-time businesses.

You can start smaller by leasing a modest property and keeping the offering simple. But you should still plan for staffing coverage and cleaning help, even if you keep payroll lean at first.

If you plan a larger footprint, a prime location, or a major build-out, you may need partners or investors. Your scale will drive your startup cost, your staffing needs, and the level of documentation lenders will expect.

Step 1: Define Your Offer And Revenue Plan

Be clear about what you will offer on day one. Common revenue starts with nightly stays in shared rooms and may include private rooms.

Write down what is included with each stay, such as access to common areas, storage options, and any included services you can consistently provide.

Keep it simple at first. A clear offer helps you price correctly and makes it easier to confirm you have real demand.

Step 2: Confirm Demand And Profit Potential

You can love the idea and still lose money if demand is weak or seasonal. Your goal is to confirm there are enough paying guests to cover expenses and still pay yourself.

Start with supply and demand. Use Supply and Demand to guide your research, then compare nearby alternatives like budget hotels and short-term rentals.

Track what competitors charge for comparable stays, then estimate realistic occupancy. Don’t guess high. Use conservative numbers so your plan survives real life.

Step 3: Choose A Location Strategy Before You Shop Buildings

Your location is part of the product. Convenience matters because guests often choose based on walkability, transit access, and proximity to attractions or venues.

Use business location considerations to think through access, safety, parking, noise, and neighborhood fit.

Then write your “must-have” list for a building. This prevents you from falling in love with a property that cannot legally open as the business you want.

Step 4: Run A Compliance Screen Before You Sign Anything

Before you commit to a lease or purchase, confirm the local rules for your exact address. Terms vary by city, and what you call the business may not match the term used in the zoning code.

Ask the planning or zoning office whether the use is allowed at that address under terms like “hostel,” “hotel,” “transient lodging,” or similar categories used locally.

Also ask the building department what approvals are required to legally occupy the building for lodging use, including whether you need a new or updated Certificate of Occupancy.

Step 5: Plan For Accessibility From The Start

Accessibility is not an add-on. Places of public accommodation that provide lodging have obligations under the Americans with Disabilities Act.

If you plan new construction or alterations, you will need to design and build to applicable accessibility standards. That impacts room layout, bathrooms, routes, and common areas.

If you are not experienced here, bring in a qualified design professional early. It is easier to plan for accessibility before construction than to redo work later.

Step 6: Decide Your Business Model And Workload

Make a clear decision about ownership and time commitment. Will you operate solo, with partners, or with investors?

Will this be full time or part time? In most cases, opening a lodging property pushes you toward full-time attention, at least through launch.

Also decide how you will cover essential roles at opening, such as guest support, cleaning, and basic maintenance. You can learn many skills, but you may still need help to cover time-sensitive work.

Step 7: Build Your Startup Cost List And Budget

Create an itemized list of what you must buy or pay for to open. Then price each item. This is where many first-time owners get surprised.

Use Estimating Startup Costs to build a complete list, including permits, deposits, professional services, and contingency funds.

Remember: scale drives total startup cost. A smaller building can still be expensive if it needs major code work, while a larger building may have more beds but also more compliance, equipment, and staffing needs.

Step 8: Write A Business Plan To Stay On Track

You can write a plan even if you are not seeking outside funding. The plan keeps your decisions connected, so you do not drift from what the numbers support.

Include your target customer, your location logic, your pricing model, your cost assumptions, and your launch timeline.

If you want a clear structure, use How to Write a Business Plan as your framework.

Step 9: Plan Funding And Set Up Your Financial Accounts

Decide how you will fund the launch: personal savings, partners, investors, or financing. If financing is part of your plan, expect lenders to want clear documentation and realistic projections.

You can learn about funding options and preparation using How to Get a Business Loan.

Then set up accounts at a financial institution for business activity so you can keep personal and business transactions separate. Banks commonly ask for formation documents and tax identification details before opening an account.

Step 10: Choose A Legal Structure And Register The Business

Your structure affects liability and taxes, so don’t rush it. Many small businesses begin as sole proprietorships, then form a limited liability company later as the business grows and risk increases.

For a lodging property, liability and contracts are real considerations. If you are unsure, a business attorney or qualified tax professional can help you choose a structure that fits your plan.

For federal background, review the Internal Revenue Service overview of business structures. For a launch checklist, see the Small Business Administration page on registering your business.

Step 11: Get Your Employer Identification Number And Tax Accounts

Many businesses need an Employer Identification Number for tax administration, banking, and many applications. Apply directly with the Internal Revenue Service using Get an employer identification number.

Next, register for any state and local taxes that apply to your activities. Lodging taxes and sales taxes vary, so verify through your state revenue agency and local tax office.

If you will have employees, you also need the correct employer accounts and processes for federal employment requirements. Start with Form I-9 guidance at I-9, Employment Eligibility Verification.

Step 12: Apply For Licenses, Permits, And Occupancy Approval

Licensing and permitting are local and state driven. You can’t assume the same rules from one city to the next.

Use the Small Business Administration guide to apply for licenses and permits to organize your checklist.

At the building level, confirm what is required to legally occupy the property for lodging, including whether a Certificate of Occupancy must be issued or amended for your use. As an example of what this document represents, see the New York City Department of Buildings page on Certificate of Occupancy.

Step 13: Plan Insurance And Risk Requirements

At minimum, expect to evaluate general liability coverage. Beyond that, your property, your services, and any lender or landlord requirements can drive the rest.

Use Business Insurance to understand common policy types and how to prepare for quotes.

If you are using financing, confirm any lender or lease requirements early. It is easier to price insurance into your plan before you sign agreements.

Step 14: Choose A Name And Secure Your Online Presence

Your name needs to work online and offline. Before you print anything, check name availability in your state and confirm domain availability.

Use Selecting a Business Name to avoid conflicts and make the name easier to remember.

Then secure your domain and social handles. Even if you keep social simple at first, you want consistency from day one.

Step 15: Build Your Brand Basics

Brand assets help you look legitimate and make it easier for people to trust you. Keep the first version clean and consistent.

At minimum, plan for a logo, simple design rules, business cards, signage, and a basic website. For support, see Corporate ID considerations, what to know about business cards, and business sign considerations.

If you need help building a site, start with an overview of developing a business website.

Step 16: Set Your Pricing And Payment Method

Pricing should reflect your market, your costs, and the experience you provide. The goal is to cover expenses and still leave room to pay yourself.

Use Pricing Your Products and Services to build a simple pricing structure and avoid undercharging.

Then set up a way to accept payment that fits how guests book. Confirm what you need for deposits, refunds, and proof of purchase.

Step 17: Set Up The Property And Prepare To Open

This is where the physical details matter. You will set up sleeping areas, bathrooms, common spaces, storage, and guest access systems.

Complete required permits, inspections, and occupancy approval before you announce an opening date. Keep records organized so you can prove compliance when asked.

Finally, launch your marketing plan so you have bookings ready near opening. If your location depends on walk-in traffic, review how to get customers through the door. If you want an opening event, use ideas for your grand opening.

Products And Services You Can Offer At Launch

Keep your first version simple. Your goal is to offer a consistent, clean, and clearly defined stay.

Common offerings include shared-room stays, optional private rooms, access to common areas, and basic guest amenities you can reliably provide.

When you add services later, make sure you can support them without breaking your compliance or staffing plan.

Who Your Customers Usually Are

This type of lodging often attracts budget-focused travelers who value price and location. Many guests also want social space and practical amenities that support travel.

Identify your top two or three guest types and design your launch offering around them. Your target guest influences location, layout, and pricing.

Pros And Cons To Know Before You Commit

These are not “good” or “bad.” They are tradeoffs you should see clearly before you sign agreements.

Here are common upsides and downsides to consider:

  • Pros: You can provide multiple bed-nights within one property, and shared spaces can support a budget-friendly model.
  • Pros: A clear niche can help you stand out when nearby options are generic.
  • Cons: Real estate commitments and code compliance can raise startup complexity.
  • Cons: Guest-facing work is constant, and problems show up at inconvenient times.

Essential Equipment Checklist

Use this checklist to build your startup cost list. The exact quantity depends on your bed count, room layout, and whether you offer a kitchen, laundry, or private rooms.

Buy for durability. Bedding, locks, and shared-space items get used hard, and replacements can become a recurring cost if you choose poorly at launch.

  • Sleeping Areas: bunk beds or bed frames, mattresses, pillows, sheets, blankets or duvets, mattress protectors, bedside lighting (if used), basic shelving or small tables (if used).
  • Guest Storage And Security: lockers, lock solutions (built-in or guest-provided approach), secure luggage storage area (if offered), door hardware and room access controls, exterior lighting at entrances (if needed).
  • Bathrooms: toilets, sinks, faucets, mirrors, shower fixtures, soap dispensers, toilet paper dispensers, paper towel or hand-dry systems, waste bins, non-slip bath mats (if used).
  • Common Areas: seating, tables, lighting, durable flooring protection (as needed), Wi-Fi equipment (router and access points sized for the building).
  • Kitchen Area (If Provided): refrigerator, microwave, sink, dish racks, shelving, cookware, utensils, dishes, cups, cutlery, tables and chairs, trash and recycling bins.
  • Laundry And Linen Handling: washers and dryers (if provided), laundry bins or carts, shelving for clean linens, storage for soiled linens, basic stain treatment supplies.
  • Front Desk And Admin: computer, printer or scanner (if needed), phone line or business phone, lockable storage for sensitive items, basic office supplies.
  • Housekeeping And Maintenance: commercial vacuum, mop and bucket system, brooms and dustpans, microfiber cloths, gloves, labeled cleaning products, basic tool kit, replacement bulbs and batteries.
  • Life-Safety Basics (Per Local Requirements): fire extinguishers, smoke detection components, emergency lighting, exit signage, first aid kits.

Skills You Need To Cover

You do not need to be an expert in everything. You do need to make sure every critical skill is covered, either by you, a partner, staff, or a qualified professional.

Focus on the skills that directly affect your ability to launch legally and serve guests safely.

  • Customer communication and problem-solving
  • Basic budgeting and recordkeeping
  • Vendor management for supplies, repairs, and services
  • Compliance coordination with local offices and inspectors
  • Basic facility readiness planning (cleanliness, safety, access control)

What Your Day-To-Day Can Look Like

Even though this guide focuses on startup, you should understand the daily work you are signing up for. This helps you confirm fit before you commit to a building.

Expect a mix of guest support, facility readiness, and business administration.

  • Handling reservations, questions, and changes
  • Coordinating cleaning, linens, and restocking supplies
  • Checking common areas for safety and readiness
  • Coordinating repairs and maintenance when needed
  • Reconciling payments and tracking expenses

Business Model Options

Your model should match your capital, your risk tolerance, and your time commitment. Choose the simplest model that fits your market and your building.

Here are common launch approaches:

  • Owner-led small property: You manage most tasks and use part-time help for cleaning and coverage.
  • Partner-led operation: Two or more owners split responsibilities and share investment risk.
  • Investor-backed scale-up: Larger property and build-out, with paid staff from day one and stronger documentation needs.

A Day In The Life Of The Owner

Your day often starts with a quick walk-through. You check bathrooms, common spaces, and entry points because guest experience is shaped by what they see first.

Then you shift to logistics. You review arrivals and departures, confirm cleaning readiness, and handle guest communication as questions come in.

Before the day ends, you handle business basics. You review payments, track expenses, and confirm tomorrow’s staffing and supply needs so opening week stays stable.

Red Flags To Watch For Before You Commit To A Property

Most launch problems come from picking the wrong building or skipping verification steps. Use these red flags as a filter before you sign a lease or purchase agreement.

If you hit one of these, slow down and verify everything in writing.

  • Zoning use is unclear, or the planning office will not confirm the use is allowed at the address.
  • The building department indicates you cannot obtain the required approval to legally occupy the building for lodging.
  • Major unresolved violations or required upgrades prevent occupancy approval.
  • Accessibility requirements cannot be reasonably addressed within the building constraints, especially if alterations are planned.
  • Safety systems or egress routes appear questionable and the seller or landlord cannot document compliance.

Varies By Jurisdiction

Local rules can change by city, county, and state. You can move fast and still do this correctly if you verify the right items early.

Use this checklist to confirm requirements where you plan to operate.

  • Planning or zoning office: Search “zoning map” and “permitted uses” plus your city name. Ask: “What use category applies to my concept at this address?”
  • Building department: Search “Certificate of Occupancy” and “change of use” plus your city name. Ask: “What permits and inspections apply before opening?”
  • Fire department or fire marshal: Search “fire inspection” plus your city name. Ask: “What approvals are required before public occupancy?”
  • State Secretary of State: Search “business entity search” plus your state name. Ask: “What filings are required for my chosen structure?”
  • State revenue agency: Search “register for sales tax” and “lodging tax” plus your state name. Ask: “Which taxes must I collect and remit?”
  • City or county business licensing: Search “business license” plus your city or county name. Ask: “What local license is required to operate?”

If you want a practical overview of registration steps, see How to Register a Business. If you feel overwhelmed, build a support team early using Building a Team of Professional Advisors.

Pre-Opening Checklist

This is your final gate before you open. You are confirming that you can legally operate, the space is ready, and your first guests can find you.

Keep it simple and complete. Your goal is a clean opening, not a perfect opening.

  • Confirm licenses, permits, inspections, and occupancy approval are complete for your location and use.
  • Confirm accessibility planning is implemented where required for your building and any alterations.
  • Confirm your essential equipment is delivered, installed, and functional.
  • Confirm you can accept payment and issue receipts reliably.
  • Confirm your website and booking path are live and accurate.
  • Confirm your launch marketing is active and your opening date is realistic.

101 Tips for Your New Hostel

These tips cover planning, rules, daily routines, and guest experience.

Some matter before you open, and others will help once you have steady bookings.

Save this page so you can come back when a new challenge shows up.

You will get better results if you pick one tip, apply it, and then move to the next.

What to Do Before Starting

1. Write down the exact guest you want to serve and what they value most (price, location, quiet, social space). Use that as your filter for every decision you make.

2. Validate demand using more than online searches. Check local event calendars, university schedules, transit hubs, and seasonal travel patterns in your area.

3. Stay at a few competing properties as a guest. Note what feels confusing, unsafe, noisy, or inconvenient, and build your setup to avoid those problems.

4. Choose a building only after you confirm the local zoning use allows transient lodging at that address. Ask for the answer in writing when possible.

5. Ask the building department what triggers a new or updated Certificate of Occupancy for your planned use and renovations. Get clarity before you negotiate a lease.

6. Budget for code-driven upgrades early (exits, alarms, sprinklers, accessibility, plumbing, ventilation). These items can change the whole deal.

7. Learn the basics of the Americans with Disabilities Act for lodging before you design rooms and bathrooms. It is easier to plan correctly than to redo construction.

8. Decide whether you will offer shared kitchen access at launch. Depending on what you provide, local health rules may apply.

9. Choose your ownership setup based on the size of the building and renovation risk. A small property may fit a solo owner, while a bigger build-out often needs partners or investors.

10. Build a launch timeline that lists every permit, inspection, and approval in the correct order. Missing one approval can delay opening for weeks.

11. Sketch your room plan with bed counts, aisles, and storage space, then verify your local occupancy limits per room. Your furniture plan must match local limits.

12. Create a pricing draft using competitor rates plus your true costs, including cleaning, utilities, supplies, and maintenance. If the math does not support paying yourself, change the plan now.

13. Decide how reservations, deposits, and refunds will work before you accept a single booking. Clear rules reduce chargebacks and arguments.

14. Plan for controlled access from day one: keys, codes, lockers, and staff-only areas. Shared spaces increase the need for basic security.

15. Set up your business registration and apply for an Employer Identification Number early. Banks and many vendors may require it.

16. If you will hire staff, set up the basics before your first shift: employment eligibility verification, wage posters, and state employer accounts. Do it early so you do not scramble later.

17. Draft simple house rules that support safety and quiet hours. Make sure you are willing to enforce every rule you write.

18. Create a pre-opening walk-through checklist for every room and shared space. Use it the same way every time so standards do not drift.

What to Know About the Industry (Rules, Seasons, Supply, Risks)

19. Plan for seasonality even if your city feels “year-round.” Build a slow-month budget, not just a peak-month fantasy.

20. Assume lodging taxes may apply to nightly stays, and confirm your collection and filing rules with state and local tax agencies. Rules can differ by city and county.

21. Treat life-safety requirements as non-negotiable. Confirm fire alarm requirements, exit signage, emergency lighting, and exit routes before you open.

22. Post evacuation information and keep exits clear at all times. Guests are often unfamiliar with the building and may not speak the same language.

23. Build a response plan for illness events, especially vomiting and diarrhea incidents. Your cleaning method needs to be specific, not vague.

24. Use cleaning chemicals correctly by following label directions for dilution and contact time. Train staff and keep Safety Data Sheets available.

25. Expect shared bathrooms and kitchens to wear out faster than private-room lodging. Choose durable fixtures and surfaces, or repairs will become constant.

26. Confirm your occupancy limits and any local rules about maximum beds per room. Your setup must match what local inspectors allow.

27. Noise and parties can create neighbor complaints fast. Pick a location and layout that reduces spillover and gives you control points.

28. Protect payment and personal data from day one. Use secure systems and limit staff access to only what they need.

29. Decide your age policy and identification checks, then apply them consistently. Inconsistency creates conflict and risk.

30. Describe accessible features accurately on listings and your website. Outdated or unclear accessibility information creates real harm and serious disputes.

Running the Business (Operations, Staffing, SOPs)

31. Write a short check-in script that covers rules, keys, lockers, quiet hours, and emergency exits. A consistent script reduces confusion and problems later.

32. Use a daily readiness checklist so beds, bathrooms, and common areas meet the same standard every day. Consistency builds trust.

33. Set a linen control routine: count-in, count-out, and a clear path for soiled items. Lost linens and mixed loads become expensive and messy fast.

34. Stock essentials in set “par levels” (toilet paper, soap, trash bags, cleaners) and reorder on a schedule. Running out in shared spaces leads to complaints immediately.

35. Use a maintenance log with a due date and a responsible person for every task. Small issues turn into bad reviews when they linger.

36. Assign bathroom checks by time blocks, not “when someone has time.” Shared bathrooms need a reliable rhythm.

37. Label breakers, shutoff valves, and critical equipment clearly. In an emergency, clarity matters more than speed.

38. Control keys and access codes and keep a log of who has them. Change access promptly when staff leave.

39. Test required safety systems on a schedule and document the results. If a problem happens, your records matter.

40. Train staff on safe lifting and safe chemical handling before they start solo work. Housekeeping injuries are common and preventable.

41. Store chemicals away from guest areas and never mix products unless the label allows it. Keep Safety Data Sheets accessible to staff.

42. Use a simple incident report form for injury, theft, or damage. Write facts the same day while details are fresh.

43. Standardize how you accept payment, issue receipts, and handle refunds. Consistency reduces disputes and chargebacks.

44. Follow payment security basics by not storing card numbers in notes, spreadsheets, or email. Use secure payment tools and restrict access.

45. Build an opening-week staffing plan that covers late arrivals and early departures. Coverage gaps create safety and service problems.

46. Cross-train at least two people on every critical task: check-in, cleaning, laundry, and basic troubleshooting. One-person knowledge is a fragile system.

47. Post required workplace notices where staff can see them and keep wage and hour records organized. Good records prevent avoidable disputes.

48. Create written rules for shared kitchen use, including storage labels, cleaning expectations, and disposal rules. A kitchen without rules becomes conflict fast.

49. Set a quiet-hours enforcement process with a clear escalation path. Protecting sleep is one of the fastest ways to protect reviews.

50. Reconcile cash and card totals every night and investigate differences immediately. Small errors compound when ignored.

Marketing (Local, Digital, Offers, Community)

51. Claim and complete your listings on major travel and local search platforms before opening. Keep your name, address, and phone consistent everywhere.

52. Use real photos of sleeping areas, bathrooms, and common spaces. Accurate photos reduce complaints and refunds.

53. Write clear descriptions that specify room type, dorm size, bed type, and shared facilities. Clarity attracts the right guests and reduces conflict.

54. Make arrival instructions easy, including transit options and late-night entry details. The smoother arrival feels, the better reviews tend to be.

55. Build a simple website that answers the top questions: pricing, rules, check-in times, amenities, and how to contact you. Do not hide the basics.

56. Run a soft opening with limited availability before you push hard promotions. Use that period to fix friction points quickly.

57. Track booking sources using a simple field in your reservation process. Put your time and budget where results show up.

58. Build referral relationships with local tour operators, universities, and event venues. Keep agreements simple and confirm any local rules about advertising and signage.

59. Create a repeat-guest perk that does not rely only on discounts, such as priority bed choice or early check-in when available. A small perk can feel big to budget travelers.

60. Share your safety and cleanliness routines in your listing content. Clear standards create confidence for first-time guests.

61. Ask for reviews with a polite post-stay message and respond professionally to every serious complaint. Your response becomes part of your public reputation.

62. Use off-peak offers that add value (laundry credit, late checkout when available, partner discounts) instead of cutting prices to the bone. Protect your margins while staying competitive.

Dealing with Customers (Trust, Education, Retention)

63. Set expectations before arrival by sending house rules and what is included with the stay. Clear expectations prevent most arguments.

64. Use simple, visible rules for shared spaces and place them where people need them most. A rule nobody sees is not a real rule.

65. Give new arrivals a quick orientation that explains lockers, kitchen storage, quiet hours, and how to get help. Two minutes now prevents two hours of issues later.

66. Create a dorm conflict process: staff mediation first, room change second, removal last. A predictable process keeps staff calm and fair.

67. Handle accessibility requests with a consistent approach and keep notes on what you offered. Accurate follow-through builds trust and reduces disputes.

68. Keep a lost-and-found log with dates and storage location and set a retention period. Then follow your own policy every time.

69. Apply identification checks consistently, especially for late-night arrivals. Consistency is your best defense against accusations of unfair treatment.

70. Give guests a private way to report problems, not only a public front desk conversation. Many people avoid complaining in front of strangers.

71. For longer stays, send a short weekly check-in message to confirm satisfaction and remind guests of shared-space norms. Small reminders prevent big conflicts.

72. Protect trust by limiting who can see guest records and by never discussing guest details in public areas. Privacy lapses travel fast and damage credibility.

Customer Service (Policies, Guarantees, Feedback)

73. Put cancellation and refund rules in writing and show them before payment. If guests cannot find your policy, they will assume the most generous version.

74. Standardize check-in and check-out times and document any early or late options. Staff should give the same answer every time.

75. Use a simple service recovery routine: acknowledge the issue, apologize for the experience, act, and follow up within 24 hours. Speed matters more than perfect wording.

76. Keep spare essentials at the desk (earplugs, spare key cards, basic toiletries) to solve small problems fast. Small fixes prevent big complaints.

77. Train staff to de-escalate by using a calm tone, offering clear options, and knowing when to bring in a supervisor. A calm process beats a clever argument.

78. Measure cleanliness with checklists and spot checks, not assumptions. Shared bathrooms and kitchens need proof, not hope.

79. Track complaints in a log and look for patterns weekly. Repeating issues are usually a system problem, not “bad luck.”

80. Ask for feedback twice: first morning after arrival and again after checkout. The first catches problems early, and the second improves reviews.

81. Respond to negative reviews with facts and next steps, not blame. Your response is often read by future guests more than the original complaint.

82. If you make any promise about safety or cleanliness, tie it to a specific process you can deliver daily. A vague promise is easy to break.

Sustainability (Waste, Sourcing, Long-Term)

83. Set up clearly labeled recycling and trash stations in common areas. Clear labeling reduces contamination and improves participation.

84. Buy durable linens and towels that hold up to frequent washing. Fewer replacements reduces both cost and waste.

85. Use refillable soap dispensers where local rules allow. It reduces single-use plastic and simplifies restocking.

86. Track your biggest waste sources for one month, then target the largest category first. Small wins add up when you focus.

87. Use cleaning products at the correct dilution and follow label instructions. Overuse increases cost and chemical load without improving results.

88. Encourage towel reuse with an opt-in approach and clear communication. Guests respond better when they feel respected, not pressured.

Staying Informed (Trends, Sources, Cadence)

89. Review local code and licensing updates at least twice a year. Rules can change with little warning.

90. Subscribe to alerts from local emergency management and public health offices. Early warnings help you prepare for outages, storms, and illness spikes.

91. Monitor your payment processor’s security updates and complete required steps quickly. Delays can lead to penalties and account restrictions.

92. Keep a simple reference file for staff that includes your key compliance topics and internal procedures. When questions come up, you want one trusted place to look.

Adapting to Change (Seasonality, Shocks, Competition, Tech)

93. Build a cash buffer sized to your slow season and fixed costs. A buffer buys time for smart decisions when bookings drop.

94. Create a plan for demand spikes caused by events or disruptions. Set a maximum occupancy you can serve well, not just what you can physically fit.

95. Test new technology in one area at a time, such as door access or guest messaging, before rolling it out everywhere. Small tests prevent expensive mistakes.

96. Watch competitors monthly for pricing shifts and amenity changes. Make small adjustments first, then scale what works.

What Not to Do

97. Do not sign a lease before zoning and occupancy approval requirements are clear. A “great deal” can become unusable.

98. Do not skip accessibility planning during design and renovation. Retrofits are harder and often more expensive.

99. Do not store payment card data yourself unless you are fully equipped to secure it. Use secure processors and limit staff access.

100. Do not let cleaning standards slide when you get busy. Shared spaces reveal neglect immediately.

101. Do not ignore repeating complaints. Treat them as a system problem and fix the root cause.

FAQs

Question: What permits and licenses do I need to open a hostel in my city?

Answer: Most owners need a mix of state and local permits, plus any approvals tied to lodging and building use.

Use your city or county licensing portal and your state’s business portal to confirm what applies to your address and business activities.

 

Question: How do I check if my address is zoned for a hostel or transient lodging?

Answer: Ask the local planning or zoning office if your use is allowed at the exact address under the local term for lodging.

Request the answer in writing or ask what document proves it, because names and rules vary by jurisdiction.

 

Question: What is a Certificate of Occupancy, and when do I need one?

Answer: A Certificate of Occupancy is a document a local building department may require to confirm a building can be legally used for a specific purpose.

You often need one before opening, and you may need an updated one if you change the building’s use or make major alterations.

 

Question: What should I ask the building department before I sign a lease?

Answer: Ask what permits, inspections, and approvals are required to legally operate lodging at that address.

Also ask what triggers a change in use or occupancy classification and what that means for your renovation plan and timeline.

 

Question: What accessibility rules apply to a lodging business like a hostel?

Answer: The Americans with Disabilities Act (ADA) applies to places of public accommodation, including many lodging businesses.

If you build new space or remodel, you should plan for accessible routes, rooms, and features that meet applicable standards.

 

Question: Where do I find the official accessibility design standards?

Answer: Use the ADA Standards for Accessible Design issued by the Department of Justice as your baseline for new construction and alterations.

If you are unsure how the standards apply to your building, bring in a qualified design professional early.

 

Question: What fire safety approvals should I plan for before opening?

Answer: Many jurisdictions require fire inspections and specific life-safety features for lodging, such as alarms, exits, and emergency lighting.

Confirm requirements with your local fire marshal and building department before you lock in your bed count and room layouts.

 

Question: What business structure should I choose for a hostel?

Answer: Your structure affects liability and taxes, and lodging often has higher risk than many small service businesses.

Review the Internal Revenue Service overview of business structures, then confirm the best fit with a qualified tax professional or attorney.

 

Question: How do I get an Employer Identification Number for my business?

Answer: An Employer Identification Number is issued by the Internal Revenue Service and is often needed for banking, taxes, and hiring.

Apply directly with the Internal Revenue Service using their official application process.

 

Question: Do I need special tax accounts for lodging?

Answer: Many states and cities apply lodging-related taxes, and rules can differ by jurisdiction.

Verify requirements with your state revenue agency and your city or county tax office before you take your first reservation payment.

 

Question: What insurance should I plan for before I open?

Answer: Most owners start with general liability and property coverage, then add other coverage based on staffing, building features, and contracts.

Your landlord, lender, or local rules may require specific coverage, so confirm requirements before signing agreements.

 

Question: What essential equipment do I need before opening day?

Answer: Plan for beds and linens, guest storage lockers, bathroom fixtures and dispensers, cleaning tools, and secure access systems.

If you offer a shared kitchen or laundry, add durable appliances, storage, and safety-minded setup items sized to your occupancy.

 

Question: How do I set up card payments safely and correctly?

Answer: If you accept payment cards, you should follow the Payment Card Industry Data Security Standard (PCI DSS) expectations for merchants.

Use a reputable processor, limit access to payment tools, and avoid storing card data in notes, email, or spreadsheets.

 

Question: What hiring steps are non-negotiable in the first month?

Answer: If you hire in the United States, you must complete Form I-9 for each employee you hire, with employer verification completed within three business days of the employee’s first day of work for pay.

Also confirm your state payroll and unemployment account setup before the first payday to avoid delays and penalties.

 

Question: How do I estimate startup costs for a hostel?

Answer: Break costs into building work, furnishings, safety systems, permits, software, and opening supplies, then add working capital.

Use conservative numbers and assume surprises, because code upgrades and repairs can change budgets quickly.

 

Question: How do I set prices before I open?

Answer: Start with competitor rates and your true costs, then test whether your price can cover expenses and still pay you.

If the numbers do not work at realistic occupancy, adjust your plan before you commit to a lease.

 

Question: What daily systems should I have in place from day one?

Answer: Use checklists for cleaning, safety walk-throughs, supply restocking, and maintenance reporting.

Simple systems prevent “we forgot” problems that turn into bad reviews and safety risks.

 

Question: What staffing roles are hardest to cover in a hostel?

Answer: Front-desk coverage and housekeeping are the roles that break first when schedules slip or demand spikes.

Build a coverage plan for late arrivals and early departures, even if you keep your team small at the start.

 

Question: What metrics should I track weekly as the owner?

Answer: Track occupancy, average rate, total revenue, cash on hand, maintenance issues, and top guest complaints.

If a metric moves the wrong way two weeks in a row, treat it as a signal to review your systems and pricing.

 

Question: How do I handle illness outbreaks in shared spaces?

Answer: Use clear cleanup procedures and disinfectants that match public health guidance, especially for vomiting and diarrhea incidents.

Follow Centers for Disease Control and Prevention guidance and train staff on protective equipment and safe cleanup steps.

 

Question: What are the most common owner mistakes in the first year?

Answer: The biggest mistakes are signing a lease before zoning and occupancy rules are clear, and letting cleanliness slide when busy.

Other common mistakes are weak access control, unclear house rules, and inconsistent enforcement across staff.

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