Why invest in hostels?

Author: Carl Michel

Categories: Alternative Accommodation, Investment
Tags: density, food and drink, hostels, youth
I think the main reason you'd invest in a hostel concept is there's a real shortage of this type of accommodation - it's a niche that hasn't been well catered for. So, while maybe twenty per cent of world travellers are youth travellers, only five per cent of accommodation is designed for youth purposes, so there's a real shortage and the other reason you'd do it is actually the economics are very good, you'll see on a sort of revenue generation index spaces that we will clearly out perform a typical three or four star hotel and the reason for that is simple, we have quite high bed densities, typically there are four beds in each, room, so you've basically got, on a smallish size room with it's en-suite bathroom, four people, consuming, food and drink, er, paying for the bed, and that creates a very, a very powerful, revenue generation per square meter.
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