Burlington Hostel, Vermont (3yrs old, 48 beds) - 10 year lease possible - $135k if before May - partial 0% owner financing, see below - $63k profit in 2013 with very limited marketing.
Hello,
Latest update: Our current lease continues until November, 2016 although a new 10 year lease has already been discussed, so a long-term commitment is likely. Also, current owner willing to either finance $35k @ $1k/month for 3 years, or sell at 50% discount + 10% commission/month for 10 years.
Ask, and I will email to you this 1) Introduction, plus these attachments:
2) income, beds filled
3) expenses by year
4) inventory
5) brochure
6) architect’s floor plan
7) room & bed layout
Owner willing to consider financing $35k of the $135k sale price (which is negotiable) @ 0% interest. The winter season is a good time to assume operations especially if you decide to make any modifications to the layout.
Our website is: www.theburlingtonhostel.com Pictures are there. Excellent Ratings & Guest Comments can be found on Hostelworld.com, Hostels.com & Tripadvisor.com. We opened July 23, 2010 in a long-term 4,000 sq ft leased space in the most perfect location in Burlington. Total monthly lease payment is currently $3,331 per month. We can handle all that Burlington can give us, we have no competition, we are the only hostel & only nice accommodation under $80 besides camping, and we have excellent ratings with a pleasant atmosphere to work in. Guests range from wee children to elderly (majority range from 22 to 42). Guests have mainly included tourists & visitors who come for adventure, exploring, school, interviews, workshops, outdoors, etc.). The atmosphere is calm, it's more of a refuge from busy Burlington rather than a party place, and half of our guests are repeat customers!
Please note that: a) thus far we have opted to be mainly a seasonal business, that is, we have only seriously operated during the summer months (May thru Oct), and have been mostly closed & away during the winter season (Nov thru Apr). Thus, lease payments, utilities, and some other expenses documented were incurred even during periods when we were not open – so profits documented consist of income from only the summer season but with expenses for both seasons. Additionally, b) our winter season is currently being developed & looks very promising, c) we do not yet have online reservations, d) we have not done half the marketing we should have, e) our policies are strict & this turns away many younger people, and f) we have had a curfew on weeknights, which again turns away many people. Fresh younger blood should boost the business significantly.
2011 was our first full summer season. We have now suffered through the three-year-new-business period & we are currently approaching the fourth full summer season (2014) with presence & profit. The hard work of growing a summer season business is over! Besides a growing summer tourist season we are targeting three large groups of winter season people who should easily justify remaining open year-round beginning this year. The State began to contract with us for one large class of winter guests, and had already filled about 12 beds each night last February & March – the tail end of our first winter season accepting State referrals. And, they are continuing again during the 2013-1014 winter season. Meanwhile, we have begun to market to our second large class of winter guests as well. So, we are very excited.
Gross income during all of 2011 was $101k, for all of 2012 it was $122k, and for all of 2013 it was $148k. The total of ALL expenses except payroll during all of 2011 was $78k, for all of 2012 it was $79k, and for all of 2013 it was $85k. Thus, our net income (profit) for 2011 was $23k, for 2012 it was $43k, and for 2013 we have seen a $63k profit!!
Our payroll expenses are listed at the bottom of document 4) Expenses. We are listing these separate because each owner will staff differently. We hired help and did very little work ourselves. So with our generous payroll we still profited but not so much as yet. We have been advised to hire J-1 Students, and Interns which would cut drastically payroll costs, and better yet if friends or family purchase the hostel and work themselves, and even live in the hostel, perhaps all payroll will be avoided or kept within the organization. Eliminating all night clerks would be very helpful also. So since this is so flexible we are leaving it out of expenses so you factor it in as you foresee running things you own way. Our current local staff is fully qualified to assume all operating responsibilities themselves, if you choose to use them. And as bed count goes up, only the basic groceries & some utilities will increase a little. Rent increases 3% per year. That’s it!
The average bed rate is $40 per night starting in 2014 (that’s $240 per night income when just 6 beds are filled), and with an average of 6 beds per night we cover the total expenses excluding whatever payroll you work out. This is our break-even point. 6 beds per night on average covers ALL our expenses. And, for each additional bed filled on average per month, above 6, we profit $1k per month. During the 2011 summer season only we averaged 15 beds per night, during the 2012 summer season we averaged 16 beds, and during the 2013 summer season we averaged 18 beds (and that year we have a higher bed rate and a weeknight curfew).
My wife & I are content to continue this business since it looks increasingly promising, yet we are also ageing & feeling we are not the most effective managers for this work. We have dropped what we felt was a fair price of $290k down more than 50% to $135k, which is
under our original cash investment, and does not include our sweat equity.
The hostel is turnkey - ready for a new owner to step-in & continue the business uninterrupted. We would offer two weeks of mentoring, and I'm sure our staff would want to continue with their work if permitted. We invested $140k in fixed assets, $30k in furnishings, and four years of our lives to starting up this business, and it is so very satisfying to be providing a service which everyone expresses appreciation for, and it is also exciting meeting so many very nice & culturally diverse people from all states & countries.
Please don't hesitate to ask anything, or arrange a time to come & see our hostel. Kind regards, Brian & Olga Dalmer (802)238-8933
Physical address of hostel: 53 Main St. 2nd floor, Burlington, VT 05401. Mailing address: 70 South Winooski Ave. #238, Burlington, VT 05401