Supplementary Hostel Income – Nano Article

The Point: Master the Art of Selling Beds!

We have all heard about making some extra cashola on the side by selling additional products and services, but at what cost? When I first started in backpacking all those years ago, I remember frequent visits from other operators coming around saying “it’s all about selling travel,” and I thought, yeah, yeah, you can’t even sell your own f###### beds! I’m not saying don’t sell additional products and services; I’m saying focus on your primary source of income, your core product, which is selling beds. Get that right, and then start focusing on other areas and additional revenue streams.

I see it all the time, even in big backpacking markets like Sydney—hostels running at 40% occupancy in winter, trying to push travel on long-term customers who have no intention (or money) of buying anything before the warmer months come around. The aim of the game is to maximize your bed occupancy, and anything under 100% year-round leaves plenty of room for improvement. Now, if you do run a high occupancy, then focus on your Average Bed Rate (ABR) and set some controls to attract higher revenue-generating guests. If you have both high occupancy and a high ABR (meaning high revenue per Average Bed), then focus on the extra revenue streams. Only then will you be justified in turning your focus from revenue per Average Bed (revPAB) to total revenue per Average Bed (trevPAB). You can read more about ancillary revenue here.

Nano Article – Word Count: 241Author: Adam Murphy