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  22 Jun 2022

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How To Manage Your Hostel The Right Way

Hostel management is a process that demands dedication and patience. As profitable as hostels can be, they require significant effort to manage.

Managing your hostel is one thing; managing it the right way, is another. We will be focusing on the latter.

Hostels are generally regarded as budget-friendly establishments that provide temporary accommodation to guests. These guests range from students to workers, and even backpackers.

Managing a hostel right, involves rapt attention to the needs of your guests. ‘What are the essential things these guests will need?’

Services like constant WiFi, outstanding security, comfortable bed, and professional staff, should be a top priority. These are some of the minimum services to be offered, especially in 2022.

In this article, we’re going to look at the right way to manage your hostel.

Read more: How To Start Your Hostel Business: Complete Guide

What Is Hostel Management?

Hostel management can be seen as the regulation and supervision of the day-to-day operations of a hostel. Managing a hostel involves many back-breaking activities.

It entails tasks like managing reservations, report-keeping, payment of staff, bill calculations, and many more. Electricity, water, and other essential services must be provided for.

In managing your hostel, you have to oversee the daily running of the hostel to cater to everyone’s needs. Needless to say, it is a crucial process.

Why Is Hostel Management Important?

The importance of hostel management cannot be over-emphasized. Managing your hostel is very fundamental to hostel growth.

By managing your hostel, you’re ensuring more patronage. Everybody wants to stay in a hostel that can offer much more than the traditional hostel services.

Great customer service, for instance, can increase your chances of getting more guests. This is a result of hostel management and a good one at that.

Also, generally reaching out to your customers and allowing them to provide feedback, can improve sales. Essentially, hostel management helps to achieve primary and secondary hostel goals.

Do You Need A Software-Based Tool For Hostel Management?

Seeing as we’ve already discussed what hostel management entails, one can easily conclude that it’s stressful.

A question that typically comes to mind is, ‘Do I need a software-based tool to manage my hostel?’ This is where hostel management software come in.

A hostel management software is a tool that helps to undertake major managerial operations. Day-to-day tasks are made possible, thanks to this tool.

This software ensures the proper managing of reservations, processing of payments, updating of data, keeping of inventory, and many more.

Having this tool is particularly great for hostels. There are times when there are increased demands for these hostels and a shortage of staff.

Many parts of the travel industry are seasonal, and this can sometimes mean handling sudden spikes in demand, with limited staff . Hostel management systems can make work within a hostel both easier and more efficient, while the automation options available can also help to free up staff to focus on other parts of the job.

What Are The Main Functions Of Hostel Management Systems?

Hostel management systems are of different types. Typically, they possess the capacity to carry out a host of functions.

These functions include:

Reservations & Inventory Management

Securing hostel reservations can be a hassle. Hostel management software helps to simplify the whole process.

With hostel management systems, you can now merge guests’ details, as well as their stays. Cloudbeds is a type of management system that can manage reservations, as it is known for being able to sync information.

You can conveniently keep a record of guests who make reservations. The fact that this process now involves less paperwork, makes these systems more enticing.

Some hostel management systems like PMS can show upcoming bookings. You can also see customers’ data.

Channel Management

Channel management is a must-have for every hostel business. This system is a form of outlet that a hostel uses to reach a larger market. Using a channel manager is one of the most effective ways to make potential guests aware of your services.

It helps to identify which of the services available will suit a particular channel. That way, you’re able to create separate sales programs for each channel.

With this system, you’ll be able to identify which channel partner is best. Highly functional Hostel Management Software helps you connect with the best channel managers like Airbnb and Expedia.

Operations Management

Operations management is a key function of hostel management systems. They ensure that those essential, day-to-day operations are carried out.

Sales, customer service, and general maintenance are a few of these daily activities. With these tools, you can create and execute a maintenance schedule.

A daily maintenance schedule would ensure that your hostel is always in impeccable condition. All the staff would be working in sync to make the environment conducive for your guests.

Regarding customer service, these tools improve communication between hostel owners and guests and potential guests. The management would find it easier to respond to inquiries the guests may have.

By studying your guests, you can easily be able to guess that they would be receptive to personalized experiences. A self-service app is a great solution to guests’ concerns about the hostel.

Direct Booking System

Guests want the convenience of booking their rooms online. This is very understandable, considering how fast-paced the world we live in.

Guests can now book hostel rooms on a booking page located on the hostel website. You can increase its visibility through social media posts.

A hostel management tool equipped with a booking engine helps to make the whole process easier for everyone. Rates are readily modified to match the current occupancy.

Amazingly, you can automatically change your room prices by applying the different rate types. This would no doubt ensure profit.

A direct booking system is exactly what you need to market your hostel services. Booking systems can afford hostels excellent opportunities to upsell or cross-sell at the most opportune moments, and customer support tools can also be provided.

Pos System

It’s normal for hostels to offer additional services other than basic accommodation. Services like food, drinks, and similar services are usually available in hostels.

A POS system or Point Of Sale system is the perfect management system to help process these payments. It is a hub where transactions are executed or finalized.

This management system is the center of transactional activities in hostels. It combines sales, payment processing, and other similar operations.

A POS system brings with it a great amount of convenience. Imagine being able to pay for drinks, food, your room, and any other service right in one spot!

CRM & Marketing Manager

CRM, or Customer Relationship Management Tool, is a management system tailored to meet the specific needs of customers. Through data analysis, it tries to manage the hostel’s relationship with its customers and potential customers.

This system is concerned with studying customers’ behavior to determine the kind of offers that would attract them. It can do so by looking at the customer’s history with your hostel.

It helps to resolve questions like, ‘What kind of services appeal to this customer?’ How do I improve on services to suit customers’ tastes?’ ‘Why do they prefer one service over the other?’

Individuals are different, and manual studies can only give you limited information on what appeals to them. The wonderful thing about CRM is that it further enables you to categorize customers based on both their real-time and online behaviors.

It also tries to enhance communication between customers and the hostel customer service. Interactions like this would help your hostel determine customer behaviors.

Housekeeping Management

A hostel management system schedules and tracks housekeeping tasks, updates room status in real-time (clean, dirty, maintenance), and manages inventory for housekeeping supplies.

Billing and Payments

Hostel management systems also helps generate invoices for guest stays and additional services, handles payments via multiple methods (credit card, cash, online), and Automated automates recurring billing for long-term stays.

Guest Communication

Hostel management systems send automated booking confirmations, pre-arrival instructions, and post-stay surveys. It facilitates direct communication with guests via email or SMS and gathers guest feedback through surveys and reviews.

Reporting and Analytics

Hostel management systems generates reports on occupancy rates, revenue, and guest demographics. They also provide detailed financial reports including profit and loss statements.

They have a feature that uses data analytics to identify trends and make informed decisions.

Mobile Access

A hostel management system provides access to the HMS via a mobile app for on-the-go management. It allows guests to check in/out and request services via their mobile devices.

The Benefits Of Hostel Management Software

By now, you probably have an idea of how useful hostel management software is. The different kinds of hostel management software enable different kinds of satisfaction.

The manual processes of hostel management can be tasking. From the traditional way of securing a room to the stress that accompanies operations management, you can just tell that a management software comes with it, multitudes of benefits.

Also, the workload the manual process brings with it can be tiring to staff. Particularly, during spikes in hostel demand, the number of staff available may not be enough to shoulder all the responsibilities associated with hostel management.

Let’s have a look at some of the benefits of having a hostel management software:


Tasks like checking the availability of rooms, analyzing customer behavior, and booking rooms, are now made brief. While these would have taken an unnecessary amount of time, we now have the CRM and POS to make the customer experience less time-consuming.

It’s amazing the amount of time you can save for more productive activities. For owners to place their hostels on different sites, it can be time-consuming to constantly update or alter their prices.

Track Customer Behavior

Thanks to CRM, you can now segment customers according to their specific needs. This does wonder for your hostel sales.

You can identify what drives or motivates customer behavior. Customer needs are unconsciously inspired by different things, and you must know those things.

What are the wonders this does to your hostel sales? For starters, it helps you gather a vast amount of data from your customers to help fuel your marketing strategy.

By tracking customer behavior, you can easily launch campaigns based on the data you already possess. Thanks to qualitative and quantitative data gathered, you can successfully launch sales campaigns.

You can also track your campaigns based on your predictions of customer behavior. Needless to say, accurate tracking of customer behavior results in massive hostel sales.

Reduced Labour Costs

Hostel management software is one of the wisest investments you can make as a hostel owner. ‘Why is this so?’ You might ask.

Manual processes of hostel management call for a lot of human labor. Of course, the salaries of these human laborers must be provided for, at the end of the day.

Well, with the introduction of these management tools, you can reduce the number of staff you employ. These tools have got you covered, by reducing staff involvement.

Channel managers, for example, help to save up on costs ordinarily associated with distribution. While you’d have had to employ labor, this software solution will come through for your business.

Property Management Software (PMS) is also available to ensure effective booking. You can use this software to send emails to customers as confirmation for bookings they just made.

Less Paperwork

The manual process uses documents to keep a record of different things. Payments, reservations, and general customer data are usually penned down in several documents.

Hostel management software has reduced the excessive paperwork. You can now keep track of your important information and streamline the booking process.

It provides for a computerized booking and payment process, along with other hostel operations. A direct booking system, for instance, enables customers to book rooms online, reducing the need for paperwork.

This inevitably gives your staff the ability to work remotely and even faster.

Ease of Administration

If there’s one thing a hostel management software can assure you, it’s the ease of administration. All the hassle becomes less, once operations are computerized.

Your guests are now opportune to enjoy different services and pay on one spot. With the POS system, ease of payment is guaranteed, as guests can even pay for food and drinks from their rooms.

You can view and update data without fear of it getting lost or stress of accessing it. You can also update room prices on your website, based on the availability of rooms.

Increase in Sales

This is another great benefit that can not be overemphasized. All the benefits already discussed all contribute to promoting sales.

Some of these tools can help modify pricing by taking advantage of your market strategy. This will help reduce your hostel revenue.

As already discussed, tracking your customers’ behaviors will help increase sales. You get an idea of which of your services these customers are interested in, and which services require improvement.

Also, seeing as customer behavior is dynamic, CRM and other similar systems can keep you updated on changes in customer behavior. This will help you work on your marketing and sales campaigns.

How Do I Set Up A Hostel Management System?

A common question that people ask is, ‘How do I set up a hostel management system?’. Let’s briefly discuss how this can be done.

The first step to setting up a hostel management system is by launching the software, and then logging in. Let’s use the POS system as an example.

The next step is to create an inventory. You can also create profiles for your staff members that will be involved in the POS operations.

You’ll also need to set up your hardware. Doing this depends on your device, but you’d normally have connected to your WiFi network and then pair it to your POS system.

Afterward, you can configure your software to recognize the payment processor that you’ve chosen.

How Much Do Hostel Management Systems Cost?

Because there is a myriad of hostel management systems, their prices differ. However, despite the disparity in prices, they usually have one thing in common; You can pay for the software through monthly or yearly subscription fees.

The free versions of this software usually have very limited features. As considerate as this is, you will have to pay for subscription fee if you want unlimited access to its features.

The most affordable hostel management software could cost as low as $80 per month but, if you’re looking for an all-in-one solution, the prices may be slightly higher. The best strategy is to get on a discovery call and confirm if your establishment needs the high-end features. This discovery call/demo is completely free .

Additional Tips For Managing Your Hostel

By now, you probably have a significant amount of knowledge on how to manage your hostel. But those aren’t all.

There is never such a thing as too much knowledge. In the same sense, you can never know too much about managing a hostel.

So, why don’t we take a look at some additional tips for managing your hostel?

Improve Customer-Business Relationship

As a hostel business, one of the best things to do is build an interactive relationship with your customers. By creating an interactive platform, you get a chance to know customer concerns.

You can do so by sending regular emails to your customers. It could be to inform them of a new service, spike in prices, or promos.

However, it’s advisable to not send too frequent emails, so they wouldn’t be regarded as spam. You can use this as a platform to get their opinions or feedback on general hostel improvements.

Periodic Staff Training

You can hold periodic meetings to teach your staff basic customer service behaviors. Customer service is unarguably one of the foundations of hostel management.

How your staff address customers say a lot about your hostel. Basic behaviors like cheerful countenance and prompt response to customer inquiries will go a long way.

Take Advantage of The Reviews

So, you’ve gotten responses from your customers about your hostel service; Now, what?

Having reviews is one thing, doing something with those reviews is another. By making reviews visible on your website, you’re likely to gain new customers.

This is why: Considering how digitalized the world is now, anybody could pick up their device and check for the reviews of a hostel. Bad reviews on your website will reduce your chances of gaining new customers.

This leads us to our next point -

Have a Functioning Website

A website is an underrated tool to manage your business. This will help improve sales.

You can download Google Analytics to help track visitors to your website. This is called Tracking Website Traffic.

It helps you discover how many visitors your site is getting, and just how far they go on your website. You can even get insights on the source or social media platform your customers used to locate your website.

Connect With Marketing and Social Media Influencers

Influencers are people with a wide following. As the name suggests, they’re experts at influencing or getting people to patronize certain goods or services.

As a hostel business, you must associate with these influencers. Building relationships or entering into contracts with them could help improve sales.

You can get these influencers to advertise your services on their platforms- their blogs, social media pages, and the likes.

Offer Unique Experiences

To manage your hostel better you may offer unique experiences such as: 

  • Local Tours and Activities: Partner with local businesses to offer unique tours and activities. This not only enhances the guest experience but also supports the local economy.
  • Themed Nights and Events: Host themed nights, workshops, or cultural events to create memorable experiences for your guests.
  • Volunteer Opportunities: Provide options for guests to engage in local volunteer work, which can be particularly appealing to socially conscious travelers.

Sustainability Practices

Incorporate sustainable practices such as:

  • Eco-Friendly Initiatives: Implement sustainable practices like recycling programs, energy-efficient lighting, and water-saving fixtures.
  • Local Products: Use and sell local products where possible, such as locally sourced food for breakfast or handmade souvenirs.
  • Sustainability Education: Educate guests about your sustainability efforts and encourage them to participate.

Provide Flexible Booking Options

Provide flexible booking options such as offering discounts for long-term stays to attract digital nomads and travelers looking to settle in for a while.

You may also provide last-minute booking deals to fill empty beds and attract spontaneous travelers.

Finally, it’s very important to cater to group bookings by offering special rates and amenities for large groups, such as tour groups or student excursions.

Cultural Sensitivity and Inclusivity

Ensure staff are trained in cultural sensitivity and aware of different customs and practices.

Implement policies that respect and accommodate all guests, including those with disabilities, LGBTQ+ travelers, and those from diverse cultural backgrounds.

If possible, hire staff who can speak multiple languages to better assist international guests.

Common Hostel Management Mistakes

Managing a hostel is not a walk-in-the-park. As profitable as it is, it’s possible to get distracted and essentially lose focus on the important things.

As a hostel owner, you have to ask yourself, ‘How can I tell when I’m making a mistake?’ These are some common hostel management mistakes:

Lack of Hostel Management System

The entirety of this article has been spent enlightening you on just how important a hostel management system is. By doing this, we’ve indirectly made known how strenuous the manual process is.

Now, imagine not having these management systems at your disposal. The strains of managing reservations, processing payments, and ensuring sales, would take a toll on your hostel business.

The time that could easily have been spent on more productive tasks would instead be spent on operations easily handled by management systems. This would set you behind your targets.

Overpriced Services

It is common knowledge that a hostel is an affordable place to stay. This is one of the things that makes it all the more popular.

It is this affordability that makes it a preferable place for tourists, workers, and even college students. The extra services like food and drinks are expected to be budget-friendly, as well.

Many hostel businesses appear to have lost sight of this. If a bed costs $30 on a normal day, spontaneously increasing its price without considering demand and other factors, may lead to less patronage.

In the same sense, a guest paying $35 for a bed would most likely not fancy paying the same amount for food. Essentially, you should ensure your services are budget-friendly, considering the target audience.

Untidy Environment

As a hostel owner, it is your ultimate goal to leave your customers satisfied. There are many ways your guests could leave dissatisfied.

Having an untidy hostel environment is a terrible first impression. It’s one of the first things your guests will notice, and may never forget.

A hostel that doesn’t have cleaners working round the clock is sure to get complaints. Unsanitary rooms, bathrooms, and recreation spots are bad experiences for your guests.

Not Keeping Track of Hostel Expenses

A business can’t measure or ascertain profits without knowing about its expenses.

A hostel business must keep track of daily costs and expenses. Hostel costs go beyond getting the establishment. Costs of bed, sheets, breakfast, and recreational equipment must be measured.

The amount spent on doing laundry is important. ‘How much was spent on washing the sheets, towels, curtains, etc?’

At the end of the day, many hostel businesses realize that they aren’t making as much profit as they thought they were. It’s always important to start with guest-related costs .

Inadequate Advertising

You’ve established your hostel business, and this feels like the end of the journey for you. Many hostel businesses however fail to realize the work of putting their business out there.

Has your business been getting the right traction? Is your website getting many visitors, but no actual customers? Are your social media posts getting views, yet no patronage?

Well, you’ve probably been advertising on the wrong platforms and not in the right way. Some social media platforms are sure to attract the right customers.

A post on Instagram about the services your hostel offers may get more traction than a post on other social media platforms. Selling your business by making catchy posts is something many hostel businesses fail to do.

Neglecting Proper Staff Training

The mistake of failing to adequately train staff is a frequent issue. Untrained staff may struggle with routine tasks, leading to inefficiencies and poor guest experiences.

The solution is to invest time in comprehensive training programs. Ensure that every team member understands their role, the hostel’s standards, and the importance of customer service. Regularly update training to cover new systems or procedures.

Ignoring Guest Feedback

Dismissing or ignoring feedback from guests can prevent a hostel from improving. Negative reviews, if left unaddressed, can harm your business.

The solution is to actively seek feedback through surveys and review sites. Respond to all reviews, both positive and negative, and use the feedback to make improvements. Showing that you care about guests' opinions can boost your reputation.

Inflexible Pricing Strategy

The Mistake: Sticking to a rigid pricing strategy without considering market fluctuations can result in lost revenue or low occupancy rates.

Solution: Implement a dynamic pricing model that adjusts based on demand, season, and local events. Use pricing tools or consult with a revenue management expert to optimize your rates.

Inadequate Safety and Security Measures

Compromising on safety and security can lead to theft, accidents, and a general sense of unease among guests.

The solution is to install robust security systems including CCTV, secure locks, and safes for guests’ valuables. Conduct regular safety drills and ensure compliance with local safety regulations. Clearly communicate safety procedures to both staff and guests.

Poor Communication

Ineffective communication between staff and with guests can lead to misunderstandings and dissatisfaction.

The solution is to foster a culture of open communication. Use tools like internal messaging apps for staff coordination. Ensure all staff are trained in effective communication skills and that they are approachable for guests.

Failure to Create a Community Atmosphere

Hostels thrive on the community vibe. Failing to create a welcoming, social atmosphere can lead to a sterile environment where guests feel isolated.

The solution is to organize social events like movie nights, tours, and communal dinners. Create common areas that encourage interaction, such as lounges and shared kitchens. Promote a friendly and inclusive atmosphere.

Not Keeping Up with Industry Trends

The Mistake: The hostel industry, like any other, evolves. Not staying updated with the latest trends can leave your hostel outdated and less appealing.

The solution is to regularly research industry trends and adapt accordingly. This could include sustainable practices, technology integration, or new types of accommodation. Attend industry conferences and network with other hostel owners to stay informed.

The Future of Hostel Management

The future of hostel management is set to be transformed by technological advancements, sustainability, and enhanced guest experiences. AI and automation will streamline operations, offering personalized services and predictive analytics for better pricing and marketing. 

IoT will enable smart rooms and real-time maintenance monitoring. Blockchain will enhance transaction security and enable decentralized booking platforms. 

Personalization will drive guest satisfaction through customized experiences and dynamic pricing. Sustainability will become a core focus, with eco-friendly practices, renewable energy, and zero-waste initiatives attracting eco-conscious travelers. 

Health and safety innovations, including contactless technologies and advanced cleaning protocols, will be crucial. Community-focused designs will offer flexible social spaces and local cultural experiences. Marketing will leverage social media, influencer collaborations, and targeted advertising. 

Emphasizing cultural sensitivity and localization will help cater to diverse guests. Hostels embracing these trends will thrive by delivering personalized, sustainable, and community-driven experiences.

Final Thoughts

Hostels are very popular establishments. With the amount of patronage a typical hostel gets, it is expected that many people would be interested in venturing into the business. A hostel is not just about its setup. Managing it is not a day’s job, and the amount of paperwork is insane.

Trying to offer your guests the best in terms of accommodation, food, drinks, and other services can be a hassle. The money involved in ensuring all this is even more worrying.

That is why you need a good hostel management system. Armed with tools to improve sales, and customer experience, and reduce costs, these systems are amazing.

Now that you see the importance of these management systems, you’re probably unsure of the system to acquire. Trying to determine the perfect hostel management system for your business? Check out Booking Ninjas' Hostel Management System.


  1. ”. The 4 most common hostel management mistakes, 20 February 2019, Accessed 3 May 2022
  2. ”. All The Tools You Need for Successful Hostel Management, 29 January 2021, Accessed 3 May 2022
  3. ”. Hostel Management Systems: Everything You Need to Know, Accessed 3 May 2022

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