 Today we will tell you about a very interesting business idea in the travel industry which is of a hostel for travellers. Travelling is becoming more and more popular with the younger generation. But what is different in their travelling approach is that they have a long list of places they want to visit and experience they want to live but all within a budget. So to achieve all this under a fixed budget, youngsters are increasingly opting to stay in hostels instead of traditional hotels. Basically, a hostel is a cheaper alternative of a hotel where instead of private rooms, travellers stay in dormitories. The whole idea is to give travellers an affordable and at the same time a sociable lodging option where they can stay, interact and socialise with people from varied backgrounds. So in that sense, hostel stays provide a much more interesting experience as compared to hotels and are fast becoming a hit among younger travellers. Hostels generally have dormitories which comprise of 6-8 bunk beds in each room along with lockers for luggage and a common washroom with each room. The dormitories can either be coined, only female or a mix of both. So you can also keep some private rooms and washrooms along with the dormitories if you want. But you have to make sure that the single rooms are priced at reasonable rates because hostels are picked by budget travellers. So an expensive or even a mid-priced room might not get many bookings. So before you start a hostel, you will have to get a trade license, a no objection certificate from the local municipal corporation and inform the local police station about it. So once the licenses are sorted, next step is to choose the location which is also the most important factor in any hospitality business. So you will need about 5000 square feet area to set up a 40 bed hostel. You should look for a place that gives easy access to public transport and is located in close proximity to most tourist destinations. So once you've logged in the location, let's look at the investment that you will need to make. For furnishing, dorm beds, locker and bedding will cost you around 6.8 lakh rupees. Whereas interiors and furniture will be another rupees 3.8 lakh and electronics will cost you about 1.6 lakh rupees. You will also have to set up a common area for receptions, seating etc which is another rupees 2.2 lakh. You may have to do some additional construction as well which will put you down by say 2 lakh rupees. Last, a cafe setup is a must for a hostel which will be another 4.8 lakh rupees and you should add another rupees 2 lakh as miscellaneous costs. So the total setting up cost of a 40 bed hostel will work out to be around rupees 23 lakh. Now to talk about recurring costs, you will have to spend around rupees 8.15 lakh every month as operation costs on staffing, utilities, rent, maintenance, marketing and other miscellaneous costs. But don't fret at looking at these monumental expenses as the turn on your investment will be fairly high. Cost breakup of some popular hostel franchise models show that you stand to earn a monthly profit of around 20,000 rupees per bed. This means every month you will earn around rupees 8.3 lakh after removing all the costs that are borne by you. We hope that you like this business idea and you soon start your own hostel. Meanwhile, for more business ideas, log on to www.entrepreneur.com for such videos.