How to start a Hostel Business – Know the details from Investment, Legal, and the other details

We know that education is critical nowadays. In such a situation, students stay away from home for a good education and do their studies. And often, they need a hostel or PG, i.e., paying guests to stay. Apart from this, tourists also look for hostels or PGs because most hotel rates are very high. In such a case, if opening a hostel or PG business can be beneficial. Here are some things that you will need to run your hostel or PG business and set up.

How to start a hostel business?

Hostels or PG is a budget-oriented place, where people usually live with a group of people and receive the full service offered here. There can be special students, students or single-family, or any other traveler. But there is a difference in hostel and pg. The hostel is the place, which is opened in a large area and many students are living there, there is staff also, through whom all the facilities like a living, food are given. On the other hand, PG is the place, which is available in small areas. Here people live in a single-family or some group. Most of the stay here is just allowed. Those who live there have to make arrangements for their food. Therefore, people have to pay a little less for the money in both places than the hotel.

how to start a hostel business

Type of Hostel

What type of hostel or PG are you wanted to open in your hostel and PG business? They are being told as follows: –

• Student hostels: – These are the hostels, which are only available to students. But they can also be of different types like –

1. Girls Hostel: – You can open only girls’ hostels to start your business. Only girls and their group can live in it. These hostels have a few different rooms; these rooms can be single, double, and 4-seater, where girls have to share their space with another girl.

2. Boy Hostel: – You can also choose the option of a boy host to start your business. Only boys and their group can live in this hostel. And there are many different rooms available, just like the girls’ hostel.

3. Mixed hostel: – A mixed hostel of both boys and girls is also available in today’s time. Where different groups of boys and girls live in one hostel, a few rooms are provided to them.

• Tourism hostels: – Many tourists visit tourism sites. They want a place to live, but they prefer to stay at the hostel because of the expensive hotel. Tourism hostels are made for such people only. It provides all the facilities for living and eating people. You can rent only if you want to rent.

• PG: – We have already told you about PG, i.e., Paid Guest, in small areas. People in this group can also live with the family. There are not many different groups in it. In this, they are given a room or flat to live in.

Location Required for Hostels or PGs

It would help if you opened a hostel or pg in a place where people search for it more. That is where people need it more. For this, you can think of an area near a college or school because most students and students like to live in hostels or PGs near college or school not to have any problem in coming and going. Then selecting such a place will help you increase your business. Apart from this, you can also open hostels on the highways or the main roads. If you are opening a tourist hostel, then you should open the hostel near the tourist spot, so that people are easy to stay here.

Costs and earnings in the hostel or PG business

Before starting any hostel or PG business, you will need to make some investment in it. Because in it you have to make things available to your customers, such as some things like bed, clothes, utensils, etc. that they use. Apart from this, you will also need a building to open a hostel. You also have to pay for the hostel’s license. In this way, you will need to invest some money to start this business. But if you have invested it once, you will not need to support it again and again.

To keep costs low in the growing competition, you have to set up this business with less investment. Accordingly, you plan your project. For this, you start with Phase-1, where you invest only 35-40% of your income and start your business and run it. You can later develop Phase – 2 and Step – 3 to give you margin time to improve your past mistakes and invest your money entirely.

Requirements For Setup of The Business

To prepare the hostel set up, you have to split your hostel area into separate areas. You are living like food, bathroom, sports room, kitchen area, common area, reception area, recreation area, bar (if necessary), etc. Apart from this, you can add your innovation while setting up a bed area. You can also provide 3 or 4 beds in one room. Apart from this, you can also set up your place and with innovative ideas.

Given Facilities (Hostel Facilities)

To start the hostel business, you have to provide some features to your customers, which is as follows –

• Security lockers: – The hostel can be called a small hotel. They work almost like hotels. But some facilities offered to those who are staying in the hotel are not given here. Includes security for luggage occupants. People in the hostel have only security lockers for their luggage. When launching your hostel business, you provide the best security lockers for the occupants. Otherwise, the misuse of your and your hostel’s reputation will be harmful.

• Bedding: – If you want to use the bed by combining double-deck or single deck or both in your hostel’s rooms, you will have to decide first. You will also need to keep in mind the privacy of those who live here because people living in the hostels share their rooms.

• Internet facility: – You must also provide the internet facility in your hostel because it has become essential in today’s time. Internet access can be either wifi or landline-based. Apart from this, your guests will need to keep a laptop or computer to use the internet. You can avail the internet by allowing you to stay in your hostel, allowing you to take additional fees.

• Maps: – If you are opening a tourist hostel, your Guest would like to travel around the city where they live. To help them and ensure their safety, you must provide them with a map of that place to get guidance while traveling in the city. If you link to the tour guide agency, you can also visit the city through him.

• Food – Drink: – In most hostels, food is provided. You can set up a mash in your hostel, which can be arranged for your guests, or you can contact any Tiffin service center.

In this way, you can establish your business well by giving all these facilities to your customers.

License and Registration

Many times it happens that people sit in the hostels and do not register themselves. Such hostels are not safe. And people do not even like to come to such a place. You have to take care of it. You will need to get a license by registering your hotel or pg. You can obtain the following license.

• Trade license: – Business license is mandatory while opening the hostel. A trade license is a certificate document, which allows businesses to continue, and for this, the paper is issued.

• FSSAI: – If you are going to provide a food facility in the business of your hostel, then you have to make sure that food is of good quality and healthy; it should not cause any harm to anybody. For this, you go to your local food and safety government agencies, and you can prove yourself there and get a license by giving an FSSAI application.

• NOC: – You may also need a NOC from the municipal corporation in your business. It would help if you also informed the local police station. It usually includes all papers and examen of the premises.


The most important in the hostel’s business, the staff at the hostel, are required. You will first need the arrangement to handle the hostel, which will take care of those who visit your hostel or other things. Apart from this, you will also need cleaning workers, guards, mash employees, etc. Keep in mind that you hire the best employee in your hostel because they depend only on enhancing or decreasing your hostel’s reputation.

Promotion / Marketing

To develop your business, you have to promote your hostel so that more people come to your hostel. You can get encouraged by placing ads outside the school or college, by advertising in the newspaper. Holding can also be used in tourism sites, as well as a pam-plate so that people can be attracted to seeing your hostel’s ad, and more people can come and drive your business.

Now you know How to start a hostel business? In this way, you can get more profit in less investment.