Thinking About Owning a Small Backpacker's Hostel? Think Again!

For over 16 years, I owned and operated The Purple House International Backpacker Hostel in David City, Panama.

And almost every day during those 16 years, at least one guest would come up to me and exclaim:

“Wow! Owning a hostel and living in a foreign country must be so exciting. You’re living the dream!”
or
“Wow! Owning a hostel must be so much fun. You get to meet tons of interesting people from all over the world!”
or
“Wow! Owning a hostel must be so convenient. You get to live where you work, and you don’t have to get dressed up or commute!”
or
“Wow! Owning a hostel must be great money. This place is packed!”

I became so weary of entertaining those types of comments that I began responding with a well-rehearsed chuckle and a deadpan response: “Oh yeah, it’s great. Dreams really do come true.”

Whew. End of discussion.

Inevitably though, a guest (usually a barely out-of-high-school kid or a middle-aged traveler on a two-week vacation from his/her “real” job) would sigh wistfully and say, “I’ve always dreamed of doing this type of thing. You know — like what you did…move to a foreign country and open a hostel. It seems like such a great life!”

Moral dilemma: Do I tell them the truth about what life is really like as an owner of a small Central American hostel? Or do I keep it positive and encourage them to blindly follow their dreams, throwing caution to the wind as I did?

Yes, I too was once a starry-eyed, wannabe hostel owner. I’d backpacked for 18 months in the 80s and had stayed in tons of hostels throughout my trip. And as a Special Events Planner for a New York City investment bank, followed up by a three-year stint as a Peace Corps volunteer in Panama, I had lived my share of “going with the flow.” Surely I was prepared to own my own hostel someday. How hard could it be?

Truth be told; I never gave any thought about the specific personality characteristics needed to run a hostel. I never considered that I’d have to do a lot more than simply smile, be friendly and patient, and speak slowly for visitors who didn’t speak much English. I never consulted with anyone about the realities of the job. I just assumed that since I had loved staying in hostels as a traveler, I would love owning one of my own.

So, learn from my experience and let me save you some time and energy: if you are seriously considering opening your own backpacker place; keep reading!

What are the Must-Have Traits to Love Owning a Small Hostel?   

1. Enjoy Having a New Routine Every Day

You’re probably nodding your head enthusiastically and thinking: “Yes! I’d love a job where every day is different!” But I’ll bet you six pairs of brand new hiking boots that you only focused on the words: “Enjoy. Having. A. New. Every. Day.” Did you notice you left out the word “routine”? While it’s true that aspects of your “every day” will be different (because each time a new guest walks through your doors your day will take on a slight variation), it will still be just that: a slight variation of the same day.

A well-run hostel has daily and dependable routines. It’s much like a Broadway play where each performance is basically the same for the actors and stagehands, but for the audience, the show is happening for the first time. At a hostel, guests arrive, and for them, everything is exciting, new, and exhilarating. For you, it’s the same-old, same-old ROUTINE. Are you going to be happy filling the coffee machine, answering phones, wiping down the kitchen counters and organizing reservations, while your guests are going out on fun beach outings and all-day hikes?

2. Be Willing to Do a Little Bit of Everything

Owning a small backpacker hostel means you likely won’t have a large staff. You might not even have a staff at all! Are you prepared for that reality?

I had a small cleaning and reception staff, but they didn’t work 24/7. There were plenty of occasions where I was alone cleaning feces-laden toilets, chasing a mouse out of a dorm room, waiting until 5 a.m. for one drunken guest to come back from a night on the town (and having to be alert and smiling with coffee ready for early departures just one hour later). Are you willing to roll up your sleeves to get the job done, no matter what?

3. Interested in Doing a Little Bit of Everything

By now you’ve probably been brought back down to earth and realize that owning a hostel isn’t all about “meeting cool people from across the globe.” But did you know you also need to have some basic administrative skills to run your business? Accounting, sales, marketing, customer service, purchasing, budgets, technology, reservation scheduling, business correspondence, website and social media admin, and even public speaking! Can you (and do you want to be) in charge of all those responsibilities? If not, you’ll have to earn enough money to hire other people to do it for you. If the hostel isn’t earning the money, will you have time to take a side job…to earn money…to pay the people? You might find yourself in a vicious cycle. (Refer to Point 6.)

4. Must Love Children

When you own and operate a small hostel, a strange phenomenon happens. Suddenly, you become a parent to children aged 18 to 80. There’s just something about the dynamic of the owner/guest relationship; many of your visitors, regardless of their age, will treat you like an authority figure and depend on you for help and nurturing. Some will ask you for advice, (not only about tourist attractions), but about whether they should divorce their wife or take that new job. Many younger travelers will get homesick and depressed and look to you for comfort. Sometimes guests get physically sick or injured and need you to help them navigate the local medical care system. They’ll look to you to moderate the noise levels and unpleasant odors in the dorm rooms. Are you ready to be a mommy or daddy to someone ten years younger (or 30 years older) than you?

5. Be Able to Set Good Boundaries

Owning and running a hostel means that there needs to be some level of order and common courtesy amongst guests. Accepting the reality that the customer is not always right is part of the job. While most guests tend to be considerate of others, there are always exceptions. Guess who gets to be the King or Queen of “No” land? (I’ll give you a hint: you’re reading this article.)

“No. You can’t smoke pot here.”

“No. You can’t turn the fans off in a 95-degree dorm room full of other travelers.”

“No. You can’t bring a prostitute back to your private room.”

“No. We can’t refund your money at 6:00 p.m. just because you found a free bed on couch-surfers.”

Getting the idea?

Are you prepared to become the nemesis of the few people who don’t give a hoot about your business success or the comfort of other guests? Will it upset you to read a scathing Trip Advisor review attacking your “difficult personality” and “harsh management style” (when you know it was written by the guy who was mad because you told him he couldn’t keep a box of five abandoned kittens in his dorm room)?

6. Be Financially Creative

When I first opened my hostel, I went on a marketing spree to drop off my flyers at other hostels in the area. One of the hostels I visited was hugely popular and had already been open for about six years. When I got there, I found the owner in the bathroom, washing down the shower walls. MAJOR wake-up call! If this owner was still scrubbing showers after six years of operation, what did that say about her income level?

At that moment I realized I’d likely never become mega-rich from owning a small backpacker hostel. But I was raised to believe that money can’t buy happiness, and while I never made enough money to buy a car or take luxurious vacations, I had a nice quality of life while it lasted. And I figured out other creative ways to supplement my income, including launching a fulfilling career as a freelance writer! (Check www.andreapayme.com)

Looking back, I wish I had asked more questions before embarking on such a serious commitment. But don’t get me wrong; I wouldn’t change my decision to open a backpacker’s hostel for all the high-decibel noise-canceling earplugs in the world! And my guests were right; I really did get to meet a lot of cool and interesting people from all over the world!