Hostel business plan template

Download this hostel business plan template in PDF or Word format, or tailor it to your project directly in our business plan software.

Discover our hostel business plan template

Our hostel business plan template gives you the structure to write a professional plan

Not accustomed to writing business plans? Our hostel business template will turn a typically challenging process into a total breeze.

Modelled on a complete business plan of a hostel in England, our template features both the financial forecast and the written part that presents the project, its team, the local market and the business strategy implemented by the management.

Cast your eyes on this template to achieve a better understanding of what your bank and investors would like to see, so that you can create a business plan that meets their expectations.

hostel businesss plan template
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How to use this hostel business plan template

Edit the hostel business plan template online, or download it

There are 3 ways to use this template:

  • Edit it online: you can adapt this template to your business idea by changing the text or the financial forecast directly in our business planning software
  • Download in PDF: if you're just after a little inspiration, you can download the hostel business plan template in PDF to read over it
  • Download in Word format: want to edit your plan on Word? Simply export the hostel business plan template to Ms Word (.docx) format
online editor for hostel business plan template

Hostel business plan template content

This template includes a complete hostel business plan example, with a financial forecast and the following sections:

  1. Executive summary: the executive summary gives the reader a clear and concise overview of your business idea
  2. Company: this section lays out the structure of your business, including its location, management team and legal form
  3. Products and services: here, you'll give an overview of the dormitories and services offered by your hostel
  4. Market analysis: the market analysis is where you’ll demonstrate that there is a strong demand for your products and services through a thorough assessment of the industry (customer profile, hot trends, regulation, competition, etc.)
  5. Strategy: this section highlights the company's game plan when it comes to pricing, marketing and mitigating risks along the way
  6. Operations: this step lays out the company's operational organisation, including the recruitment plan
  7. Financial plan: the financial plan includes a table of sources & uses (initial funding plan), and complete financial statements (P&L, balance sheet and cash flow statement).
  8. Appendices: this part provides the opportunity to include multiple financial appendices generated by our software (debt maturity profile, monthly financial statements, financial analysis, etc.).
cover page and table of contents for the hostel business plan template by The Business Plan Shop
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Executive summary of the hostel's business plan

The executive summary gives the reader a clear and concise overview of your business idea.

Our hostel business plan example's executive summary is formed of the following subsections:

  1. Business overview: in this subsection, we outline who the hostel founders are, what legal form they've chosen for the business, and the rationale behind the choice of their location
  2. Market overview: in this subsection, we summarize the conclusions of the market analysis performed by the hostel's owners and explain who they might target (our hostel business plan template targets backpackers, solo travellers and groups of friends)
  3. Financial highlights: in this subsection, we give an overview of the forecasted financial performance of the hostel over the first 3 years of operation
  4. Our ask: in this subsection, we outline the amount of financing required to start the hostel and how it's going to be funded (the founders are seeking a bank loan to start their hostel)
executive summary for hostel business plan sample

Company overview included in our hostel business plan sample

This section lays out the structure of your business, including its location, management team and legal form.

Our hostel business plan template's company section is formed of the following subsections:

  1. Structure & Ownership: in this subsection, we outline who the hostel shareholders are, what legal form they've chosen for the business
  2. Location: in this subsection, we present the area surrounding the location chosen for the business and the layout and main features of the premises
  3. Management Team: in this subsection, we give an overview of the background of each of the hostel's founders and explain how they met and why they decided to start a company together
company overview included in hostel business plan template
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Products and services offered by the hostel

The products and services section is where you will present the different services offered by your hostel as well as extras that can be purchased on site.

In our hostel business plan template products and services section, we cover:

  • Dormitories: a selection of five dormitories with 52 beds showcasing Liverpool’s unique culture (each dorm customised to fit the differing tones of iconic Beatles songs).
  • Services: a range of services available to our guests including a washing machine, free bed linen and towels, vending machine, access to the kitchen, etc.
  • Bar area: a selection of alcoholic and non-alcoholic beverages, as well as snacks for sale including bottled beer, fizzy drinks, crisps etc.
product and services description of the hostel business plan example

Market analysis for the opening of the hostel

The market analysis is where you’ll demonstrate that there is a strong demand for your products and services through a thorough assessment of the industry (customer profile, hot trends, regulation, competition, etc.)

Our hostel business plan example's market analysis section is formed of the following subsections:

  1. Demographics and Segmentation: in this subsection, we explore the market in depth. We look at the supply and demand sides both at the national and local level, analyse the hot trends perceived by the founders, and the key statistics that will help the founders build their positioning
  2. Target market: in this subsection, our founders explain who they view as their ideal customers (our hostel business plan template targets backpackers, solo travellers and groups of friends) and why they chose to target them
  3. Competition: in this subsection, we take a look at the direct (other hostels nearby) and indirect (Air Bnb, hotels, holiday parks) local competition to ensure we have a differentiated positioning and that the market is large enough to accommodate the arrival of a new hostel
  4. Regulation: in this subsection, we give an overview of the main regulation applicable to our hostel
market analysis section of the hostel business plan template
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Setting the strategy for our hostel

This section highlights the company's game plan when it comes to pricing, marketing and mitigating risks along the way.

Our hostel business plan template strategy section is formed of the following subsections:

  1. Pricing: in this subsection, we explain how we set the prices of our main categories of products (beds in the dorms, beverages and snacks) and the rationale behind our choice
  2. Marketing plan: in this subsection, we explain what action we'll put in place to build awareness and loyalty among hostel guests
  3. Milestones: in this subsection, we give an overview of the main goals we set for ourselves for the next 3 years
  4. Risks and Mittigants: in this subsection, we perform an assessment of the medium and long-term risks that could jeopardize the financial viability of our hostel and outline how we intend to mitigate them
hostel business plan example: stragtegy section

Operations section of the hostel business plan template

This part lays out the company's operational organisation, including the recruitment plan.

Our hostel business plan example's operations section is formed of the following subsections:

  1. Personnel plan: in this subsection, we explain what our opening hours will be and explain the responsabilities of each of our hostel staff members
  2. Key assets and IP: in this subsection, we list the assets and intellectual property rights which are critical to our business operations and explain how we will secure and protect each of these
  3. Suppliers: in this subsection, we give an overview of the main suppliers we will use our what commercial terms have been negotiated with them
hostel business plan template: operations section
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Financial plan included in our hostel business plan template

This section presents the expected financial performance of the hostel over the next 3 years.

Our hostel business plan example's financial plan is formed of the following subsections:

  1. Start-up funding: in this subsection, we list the cost of each item required to launch the hostel
  2. Important assumptions: in this subsection, we explain the methodology and the main assumptions used to build the hostel's financial forecast
  3. Sales forecast: in this subsection, we detail the expected revenues and growth rate for our hostel in the coming years
  4. Cost structure: in this subsection, we list all the expenses required for our hostel to operate smoothly
  5. Projected Profit & Loss statement: in this subsection, we analyse our forecasted P&L and comment on the expected profitability of our hostel over the next 3 years
  6. Projected cash flow statement: in this subsection, we analyse the expected cash generation of the hostel
  7. Projected balance sheet: in this section we give an analysis of the liquidity and solvability implied from our balance sheet
hostel business plan forecasted P&L

Appendices of the hostel business plan template

This part provides the opportunity to include multiple financial appendices generated by our software (debt maturity profile, monthly financial statements, financial analysis, etc.).

Our hostel business plan template's appendices include:

  1. A Maturity profile chart showing the principal repayments of their loans over the next 3 years
  2. A monthly cash flow forecast: showing how much cash is being generated or consumed each month over the first 3 years of operations
hostel business plan template: monthly cash flow forecast

Hostel business plan template sample

Executive Summary

Business Overview

Liverpool Lively Hostel will be a new hostel located on Lark Lane in Liverpool.Liverpool Lively Hostel has been created with the intent of welcoming tourists and groups of friends looking for cheap accommodation in Liverpool city.

Our goal is to create a hostel with a vibrant, friendly and fun-loving vibe - we would like to welcome anyone looking to immerse themselves into Liverpool’s unique culture, whether they be a single traveller or group of friends.

Our hostel, located in a three-storey building on 1 Lark Lane, will have a total capacity of 52 beds in 5 mixed dormitories.

The neighbourhood has strong public transport links, making access to the hostel easy for guests. St Michael’s train station is 8 minutes away on foot, as well as several bus lines - with the number 82 offering a direct trip to Liverpool City Centre in just 20 minutes. Guests can also hire city bikes, with the closest station situated just 2 minutes from the hostel on foot.

Liverpool Lively Hostel is a limited company with a capital of £20,000 and will be managed by Rachel K and Katrina R. Rachel and Katrina share a passion for travel and valuable experience in the hostel industry, having both worked in similar businesses for several years.

Market Overview

Global Market

Hostelworld estimates that the hostel industry is currently valued at $5.2 billion in bed revenue and is projected to grow 7-8 per cent year-over-year.

Using data from Hostelworld and several travel agencies across the globe, the founder of HostelHelper believed there to be approximately 15,643 hostels operating worldwide in 2019.

England is said to be the 7th highest European country with the most hostels, boasting 226 hostels.

Phocuswright has also projected that the revenue of the hostel industry will increase by 5.5% per year from now until 2025.

Local Market

According to the Global Trends Report 2014, the UK hostel market was estimated to reach £216m by 2018, with a total of 653 hostel outlets by the end of the same year.

Liverpool is a vibrant city with a population of 497,784. Its history, architecture, coastline and welcoming locals make it a place well worth visiting - with VisitBritain recording that the city’s visitor economy is now worth over £4.9 billion.

In 2019, Liverpool welcomed 67.3 million visitors. The demand for use of serviced accommodation within Liverpool has increased by 6% in the last year, with 2.8 million visitors opting to check into hotels and hostels during their stay.

Liverpool hotels saw a 5% rise in weekday occupancy during 2018, bringing its average occupancy up to 81.8%. With average occupancy rates in cities outside of London remaining stagnant at around 76%, Liverpool is significantly above the national standard.

The vast majority of hostel visitors are backpackers. With millennials now accounting for 70% of all hostel travellers, the typical age range of hostel goers is from 18 to 35 years old.

Opting for experiences over luxury, Hostelworld has found that 49% of backpackers consider cheap prices to be a major factor when picking hostel beds to lay their head - especially because only 20% of future travellers will be employed, down 2% from previous years.

Only 13% of backpackers now book rooms via last-minute walk-ins, as the electronic revolution has meant they prefer to book via computer (47%) and mobile apps (55%). This means that online reviews are more important than ever before, with 28% more travellers relying on reviews when seeking out new accommodation than the generations before.

A backpackers budget varies depending on the location and time of the year. The fewer the beds in the room, the more expensive a room. Hostels in London fall around the £15,00 – £25,00 per night mark. In Europe, many travellers pay anywhere between €19 – €44 per night in peak season.

Financial Highlights

The projected sales for year 1 are expected to be £214,690 and we anticipate them to grow to £222,390 in year 2 and £227,803 in year 3.

Based on the current plan the EBITDA should grow from £23,604 in year 1 (with 10.99% of margin) to £27,834 (with 12.52% of margin) in year 2 and should reach £30,559 in year 3 (with 13.41% of margin).

The improvement in EBITDA over the plan is mainly related to the improvement in the occupancy rate, resulting in better absorption of fixed costsin years 2 and 3.

The net operating cash flow is expected to remain positive throughout the plan - reaching £26,761 in year 3.

Our Ask

In total, our initial funding requirement amounts to £150,000. The partners will contribute to £65,000 (43% of the total), and we would like to secure a loan to cover the remaining £85,000.

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Hostel Business Plan Template FAQ

What is a hostel business plan and do I need one?

A hostel business plan is a written document that sets out the commercial, operational and financial objectives of the company over the next 3 to 5 years.

It consists of two main parts:

  • A written part that presents, in detail, your hostel business, the team, your strategy, and your medium-term objectives.
  • A financial forecast that highlights the expected profitability of the hostel and the initial funding requirements.

The lack of business planning is one of the main reasons why more than 50% of startups fail within 5 years. If you're starting a hostel, writing a business plan is a must-have in order to reduce the risk of failure of your project.

Business plans are also required by most lenders and investors in order to secure financing, therefore a business plan is also highly recommended if you're seeking a loan or equity investment for your hostel.

How do I write a business plan for a hostel and is it difficult?

Writing a hostel business plan without The Business Plan Shop can be both error-prone and time-consuming - whether you're new to entrepreneurship or experienced:

  • You'll need to research the structure of a business plan, what to include in each section, and what key elements investors and lenders expect to see
  • You may encounter writer's block (especially if it's the first time you're writing a business plan for your hostel)
  • You'll need to create a financial forecast on a spreadsheet which requires a solid understanding of accounting and financial modelling in order to be done without error
  • You'll need to spend hours formatting financial data on Excel or Sheets before it's ready to integrate into your business plan
  • Any updates to your hostel business plan or financial forecast will need to be done manually

Luckily for you, The Business Plan Shop's online platform and hostel business plan template guide you through every stage of writing a business plan, so that you can spend more time managing and growing your business instead.

Our editor follows a best-in-class structure for professional business plans. Each section and subsection includes examples and instructions to help you, while our business plan templates provide further inspiration if you're stuck.

Our financial forecasting software helps you create a forecast and integrate it into your business plan with ease. Anytime you update your data, your business plan automatically updates.

And with our forecasting software all the calculations are done for you, without errors.

What is the budget for a hostel and how much does it cost to get started?

The budget to start and run a hostel will depend on the exact concept and location.

A small hostel set up in a suburban area with limited beds and basic services requires limited investment. Hostels located near popular tourist attractions, landmarks, or in high foot traffic areas are likely to attract more guests. While these locations can drive higher occupancy rates, they may come with a higher price tag.

If the property requires renovation or remodeling to convert it into a hostel, these expenses should be factored into the budget. Additionally, furnishing the hostel with beds, furniture, linens, and other amenities will incur costs.

As an example, in our hostel business plan template the total initial funding requirement amounted to £150,000, with the founders contributing £65,000.

In order to assess the exact budget for your hostel idea, you need to do a financial forecast using a financial projection tool such as the one we offer.

Is The Business Plan Shop the best hostel business plan template for me?

The package we offer at The Business Plan Shop goes way beyond a simple blank template you need to fill. With our platform you get:

  • Access to one of the best business plan software on the market
  • Access to our hostel business plan template which contains a complete example of a written business plan and financial forecast to start a hostel
  • Access to our entire business plan templates library - giving you dozens of examples to take inspiration from
  • Access to our financial planning and analysis platform so that you can track the actual performance of your business against what you had planned in your business plan and re-plan easily

But you shouldn't take our word for it: try our solution for free and make your own opinion!

How does the free trial of The Business Plan Shop work?

The free trial enables you to try the software for free during 7 days in order to verify that it meets your requirements before buying.

Some features are limited during the free trial, the main limits are:

  • You can only create one business plan
  • The financials of the first year are visible, but data for other years are hidden
  • You can export your plan in PDF but not in Word or CSV
  • No access to our business plan templates

You can create your account and start your free trial here.

How much does The Business Plan Shop’s hostel business plan template cost?

Access to our template is included with all our paid subscriptions.

Please visit our pricing page to learn about this in more detail.

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