The key to successful hostel operations lies in systematically obsessing over guest experience, not just providing affordable beds, according to Nathan St Cyr, Co-founder of Howzit Hostels, which achieved recognition as North America’s top small hostel within three years of opening.
Breaking the Hostel Stereotype
“We’re going to build this thing out and renovate this to this unbelievable boutique swaggy feel,” St Cyr says, describing his team’s approach to elevating the traditional hostel concept. He argues that modern hostels must decisively break from dated perceptions of “dirty, dingy” accommodations.
This commitment to premium positioning extends beyond aesthetics. “We focused on one thing and one thing only, and it was obsessing over the guest journey,” St Cyr explains. “Every review that came in on a daily basis, we as a team would sit down, we were going to set our own standards versus what the existing hostel standard is.”
Systems-Driven Excellence
According to St Cyr, consistent delivery of superior guest experiences requires robust operational systems. His company implements the Entrepreneurial Operating System (EOS) methodology to ensure reliable execution across all aspects of the business.
“When you put that combination together of team building and then creating systems and processes that ensure that can be audited and that ensure high level execution, that’s a really powerful dynamic,” St Cyr notes. He emphasizes that getting both elements right, people and processes, is crucial but challenging for many operators.
The Power of Professional Management
This systematic approach has allowed St Cyr and his business partner to dramatically reduce their direct operational involvement. “As of last year we’ve really shifted to really about three to five hours most per week on operations,” he says, with the majority of their time now focused on growth and investment activities.
St Cyr attributes this operational efficiency to careful team building and process development. “The only way that you’re able to do that is if you’ve created the right team and the right processes,” he explains.
Building Trust Through Transparency
The success of this operational model has helped build credibility with investors. “People have really begun to see us building in public and trust what we’ve done,” St Cyr says, noting that a recent capital raise secured over $2 million in just weeks without public marketing.
Looking Forward
St Cyr sees continued opportunity to innovate in guest experience delivery, particularly around “experiential growth of the hospitality market.” His company maintains a full-staff model to support enhanced programming, believing that superior service justifies higher operational costs.
“We dive deeply into the experiential side of things,” St Cyr explains. “We are not a staff-light model… you need to have the volume of traveler that will hit the occupancy levels to end the revenue numbers to ultimately be able to not only afford a great team, but also to provide enough upside in NOI.”
