The 7 Most Common Mistakes Hostel Managers Make (that cost you money)
Posted on 6 June 2018
The 7 Most Common Mistakes Hostel Managers Make
(that cost you money)
Hostel managers and owners have more than enough to do: manage staff, attract guests, ensure cleanliness and safety, manage reviews and complaints, deal with partners, set rate plans, all while creating a great hostelling experience for their guests. Many of these tasks could be made a lot easier. Here are some helpful tips to recognize the most common mistakes hostel managers make and ideas on how to change them.
#1 Using a bad channel manager (or none at all)
If you’re looking to maximize revenue, your hostel needs to be listed on most major booking platforms. Each booking engine extends your reach by thousands of visitors per day looking to potentially book a bed at your hostel. Some channel managers restrict you to 2 or 3 channels, or they charge fees for each additional channel. You need to do your homework and find a channel manager that allows you to add channels for no extra fee so you can start creating and integrating your listings! You’ll be guaranteed to get more bookings from a much wider audience and tap into markets in several countries.
#2 Trying to compete with hotels
Even though studies have shown that there are very little differences between guests who book at hotels and those who stay at hostels, the lines are beginning to blur. In this day and age, even the most basic traveller is swayed by the promise of luxury on a budget. It can be difficult for hostels to retain any occupancy next to a low-cost hotel chain. You may feel forced to decrease your prices dramatically on some booking engines, but you can find an alternative by focusing on the little differences that exist.
"Guests are simply looking for a decent place to sleep with a great social atmosphere."
So instead of competing dollar to dollar with these establishments, you need to focus on what hostel guests want - which is typically a fun and social atmosphere with a decent place to sleep. Make it a priority to keep this atmosphere consistent every day of the week. Describe why your backpacking experience is unique, share it online and showcase it on your website and OTAs. You’ll find in time that you can leverage the value-added hostels deliver and help guests decide to stay at your hostels instead of a budget hotel.
#3 Ignoring the profit potential of Rate Mixing
Even though advanced rate mixing is a practice already widely adopted in the hotel industry, only a few of the big hostel chains have joined in on the fun. Why is it important? Implementing dynamic rates increases your yield (revenue). Rate mixing gives you better chances of being booked by customers who are looking at your offers because they always see the best combination of value-for-money. Plus, you won’t need to constantly adjust your nightly rates whenever demand or seasons change and events are coming up. For a detailed explanation on how rate mixing works in general, you can read this article that was published on the topic or check out this step-by-step guide to start maximizing revenue right away.
#4 Missing out on guaranteed revenue
Travellers love discounts - and so can you. Present travellers with the choice of paying the price of the reservation upon arrival or offer them a discount if they pay in advance. A simple way to do this is to give your customers a % discount if they make it a prepaid non-refundable booking right away. First of all, hostel guests who pay a non-refundable rate are much more likely to show up. But even if for any reason they couldn’t make it - you made them an offer that gets you guaranteed revenue.
#5 Not developing a rate strategy
Customers will first judge your hostel by your average rate per night. Your rates position your hostel, so it is important to develop a rate strategy that works out profitable for you and reflects the value that your hostel delivers. Don’t under-value your hostel by offering deep-discounts all the time to attract guests. Create an honest comparison of your hostels and the competing hostels in your area.
Look at services offered, dorm facilities and free perks. Develop value packs and include meals or other services into your nightly rates. Create offers that don’t allow for direct comparison and highlight other benefits your hostel guests receive, aside from low rates per night.
#6 Underestimating the power of Google
Creating listings on different websites may be a time-consuming (and annoying) task in the short run. Most hostels write a single description once and use it across their own website and listings on booking engines. In the long-run, it pays off to do the opposite: when a website lacks content, search engines have nothing to scan and display. Aim for high quality content with the right keywords that will show as a top result on Google, lure readers to your page and show them how great your hostel really is.
#7 Forgetting the benefits of automation
There are A LOT of things around your hostel that can be automated today. Send automatic email replies to let your guests know they’ve got the right address and you will get back to them. Start using a channel manager to update your availabilities automatically - paying a subscription works out cheaper if you consider the time you would lose doing it all yourself. Implement rate plan management tools to change to special rates without having to remember to do it yourself every season. Neither you nor your staff should spend working time on repetitive tasks that can be done just as well by a computer.