When you think of hostels, the image of a small, budget-friendly, often outdated lodging comes to mind. Nathan and Michael, the co-founders of Howzit Hostels, are flipping that narrative. In our latest podcast episode of Direct Booking Simplified, these two entrepreneurs shared how they leveraged their backgrounds in real estate and luxury short-term rentals to redefine what a hostel can be—and how their direct booking strategy is a game-changer Summary and Highlights Meet the Founders Nathan and Michael are the driving forces behind Howzit Hostels, a brand synonymous with upscale, community-driven hostel experiences in Hawaii. With $10 million in assets, $2.5 million in annual revenue, and awards like “Best Hostel in North America,” their journey is as much about bold decisions as it is about smart strategies. Their story began in the midst of the pandemic when most were pulling back. They took a leap of faith and acquired their first hostel in Maui. By listening to guests, implementing airtight systems, and building a values-aligned team, they’ve turned a once-average property into a high-performing hospitality business. The Secret Sauce: Direct Bookings One of the most valuable insights Nathan and Michael shared was their approach to direct bookings. By increasing their direct bookings by 12%, they’ve not only saved $59,000 annually in OTA commissions but have also increased the valuation of their business by $630,000. As Nathan explained, “Direct bookings are not just about revenue; they directly impact net income, which drives valuation. For a commercial hospitality business like ours, that’s everything.” Direct Booking Tactics That Work Mindset and Tactical Advice Nathan’s mindset advice was simple but profound: “Reframe your relationship with fear and failure.” Michael’s tactical advice? Don’t hesitate to seek help, whether it’s through your network or professionals. Why It Matters For hosts navigating the ever-competitive hospitality market, Nathan and Michael’s story is a reminder that bold decisions, meticulous planning, and leveraging the right strategies can lead to remarkable results. If you want to hear more about how they’ve built their business, tackled challenges, and created a sustainable direct booking strategy, listen to the full episode of Direct Booking Simplified. Join the CommunityWe’re passionate about empowering hosts with tools and strategies to succeed. Join our CraftedStays community to connect with like-minded professionals, learn proven tactics, and discover how our platform can help you build a direct booking powerhouse. Follow Michael and Russell Here ⤵️ Transcription Gil: Hey folks, welcome back to Direct Booking Simplified, where we break down the strategies and tactics to win in direct bookings. On today’s show, I have Howzit Hostiles, Nathan, and Michael. Welcome to the show. Nathan: Yeah, it’s great to be on. Thanks for having us, Gil. Gil: this is pretty cool. I’ll admit to both of you that this is our first pairing. We’re like 40, almost 50 episodes deep and we have not yet had a duel on the show. So I’m very interested in how this is going to be and how we can bounce ideas off each other. It’s always been a one on one. I haven’t even done a single show, uh, to be quite honest, but I’m very interested in kind of like having you guys both here and, uh, having you guys talk about just how you guys, Divide and conquer both sides of your business. Gil: Um, but before we get too deep into it, uh, Nathan, Michael, do you mind kind of sharing a little bit about your property management, what you guys have done and kind of how you guys work together? Nathan: Yeah, absolutely. So I’ll kind of kick us off here. Um, so Mike Russell and myself were the, the co founders, uh, of Howzit Hostiles. Um, if you, we each have our own story, obviously that, uh, from a, from an origin story that led to a moment. But, um, I think what people are most interested in with us, there’s, there’s two sides of our story that, that we share. Nathan: That people are drawn to, um, and, and want to hear about. And one side of it is the, kind of the investment in the real estate side where, you know, we, we basically. Took a 400, 000, uh, down payment and investment and, uh, forced about 4 million of equity in under two years. And that has now led to us owning from that 400, 000 down payment, 10 million worth of assets, uh, where we’re driving. Nathan: You know, 2. 5 million worth of revenue, uh, 800, 000 worth of NOI and 500, 000 worth of net income. And so from the investment side, I think that that part of the story is like, wow, you guys really compressed time and utilized your entire life’s work to recognize an opportunity and then jumped on it and, and, and took advantage. Nathan: From the hospitality side. I think that the part that people really go, Whoa, wait a minute, what hostile, what is a hostile? You know, like, aren’t these all dirty dingy things that like, and, um, again, we, we recognized opportunity and when they go, Whoa, they go look at our website, they go look at what we’re doing. Nathan: Um, there’s these two, these two guys. knew nothing about hostels and in the midst of a pandemic when everybody else was, you know, you know, really wait, you know, sitting back going, what’s going to happen to the world. We decided to take massive action and go all in on our vision and uh, purchased an, an existing hostel. Nathan: And in two and a half years, uh, we were awarded as the best hostel in the North America. And so people from the hospitality side are like, wait a minute, you had no experience and you went in and created the best hostel in North America. What the heck? And, um, and so when we look at the hospitality side of what we’ve done, we really attribute that to these three, three major components. Nathan: And