Starting a business is inevitably going to involve varied challenges. Starting a hostel business poses an additional, different issue compared to other startups. Simply put, the general population lacks a basic understanding of what a hostel is. I have encountered this issue more times than I can count. It’s a problem that really won’t go away.
[pullquote]So you are making a homeless shelter[/pullquote]
The first time this issue surfaced was when I explained my project to friends and family. “So you are making a homeless shelter?” was one response I frequently received. Other people made banal references to the horror film released in 2005. When I asked a builder for a quote for some renovations to the hostel, he suggested spending €100k on luxury design fittings and minor improvements, only to then charge a bit more than the competition. He simply didn’t understand the hostel market, where utility is gained from the connections formed rather than solely from the space itself. At least I was fortunate that Budapest is a city with many hostels. Hopefully, the local authorities here would understand the concept of a hostel, I thought to myself. But in this case, their understanding brings disadvantages. They try to extract every cent from hostels' profit margins, imposing numerous taxes and regulatory burdens. Overall, the concept of a hostel must be clearly distinguished from that of a hotel, simple dorm-room, guesthouse, or any other form of accommodation. A better understanding of hostels would benefit all those interested in this market. Additionally, a greater awareness of the wider social benefits that a hostel brings to an area should lead to less regulatory and tax pressure from local authorities.