There’s something so magical about hostels. Unlike fancy hotels where rich families stay or AirBnBs that are perfect for a newly married couple who only want to spend time with each other, a hostel is a place where you can meet other people, make friends who live halfway across the world, and share adventures with them that you’ll never forget–whether that’s clinking shots at the bar or going on a walking tour of an ancient city.

Which is why, as a modern, entrepreneurship-minded person, who’s always coming up with ideas for online businesses and smokes Juul e-cigarettes instead of cancer-causing tobacco, you’ve decided to start a hostel. Whether it’s in New York City, Barcelona, or Bangkok, you’re ready to make it in the hostel business–and here’s how:

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1 Be smart about design

Way back when, it was easier to get away with having an ugly–and possibly even disgusting–hostel. Surely you’ve heard horror stories, of stolen passports and lice in the beds, not to mention the mold building up in the en-suite bathroom. Nowadays, people expect a useful design that’s both beautiful and practical (for example, providing wifi strong enough that someone hungover can chill in bed watching movies like People You May Know on Netflix).

Especially if you want to attract Generation Z, you’ll want to focus on impressing them. According to, “Almost 80 percent of Generation Z holiday shoppers do online research before making a holiday purchase, even for products that cost under $50. As the price of the goods increases, so does the percentage who research before they buy.”

2 Location, location, location

Of course, it’s going to be a bit pricier to have a centrally located hostel or one that’s easily accessible from public transit, but it will pay off with the amount of money you make from customers who choose you over the hostel that’s only two blocks away. 70 percent of hostel-goers are millennials, and as you know, saving money is important to them. So paying 45 euros for a taxi to your hostel is less worth it than pay 10 for the metro and an extra 5 for a night’s stay.

Safety too is an issue, of course. Make sure that your hostel’s visible and on a well-lit street–that way, travelers will feel safe upon arrival, and people searching for a hostel on the street will be drawn to yours.

3 Get online

If you aren’t online already, you have to be. First of all, you’ll want to make sure you have a beautiful, reputable website–after all, 70 percent of people don’t trust poorly designed websites, so if you can’t hire a web designer, then find a template for free on sites like, which will look good and be practical for features like booking accommodations online. Additionally, make sure that your hostel appears on Hostelbookers and Hostelworld, two huge sites that simplify the search and payment process for tourists.

Additionally, create social media profiles on Twitter, Facebook, and Instagram to draw more users to your site. If you really want to take an extra leap, write up a blog too, where you talk about the city you’re based in and challenges travelers face all around the globe (with solutions to them). That way, you’ll get more Google hits when people search for those topics–and they’ll stumble across your site.

4 Offer cool activities

And, of course, no hostel is complete without cool activities. That’s the reason why people choose hostels in the first place: to meet people, rent bikes, take walking tours, and even attend open mic shows and storytelling shows. The Beehive in Rome, for example, is perfect for anyone looking for a chill yet fun experience: “hostel activities can include game nights, open mic, music performances, yoga – the sky is the limit for many hostels and for larger hostels, the more activities, the better.” If you’re looking for an exciting party, then a better place to stay is the party hostel The Yellow, which is just down the street.

If you’re not sure where you start, then checking out hostels such as these and the ones in your area will definitely get you inspired. Make sure you check out Spotted by Locals, too–which has city guides for 68 cities worldwide costing only $3.99 each–if you want to be the most expert hostel info desk in your city.

5 Make it legal

Finally, the most important thing: you need to make sure you have all the licenses and leases necessary to operate legally in your country. It’s worth hiring a lawyer, even, because how horrible would it be if you made the world’s most fabulous hostel, only to have it shut down a month later? Whether your customers are paying the average $5 a night in Asia or $20 in Western Europe, no deal will be worth it for them if you have to cancel their reservations at the last minute when you’re shut down.

Where are you thinking of opening your hostel? What challenges do you think you’ll face?