@Aaron T.
I love hostels. I actually worked at a hostel for 10 years. Started as a front desk agent/bartender and worked my way up to general manager.
Covid is the only thing that would worry me but other than that, in the right location, a hostel can be extremely profitable. My company would convert hotels to hostels every year since 2016.
A decent low cost breakfast, luggage storage, safety boxes, daily activities such as bar outings, outgoing staff to engage with the guests, and a good cleaning department will have you as top hostel on Hostelworld in no time.
Policies in place like “proof of forward travel” will do wonders in allowing you to maintain a travelers ambiance amount your visitors. Our hostels had a “travelers only/no locals” policy for the accommodation side but the locals were absolutely welcomed at the bar/restaurant.
It’s all about the ambiance, good vibes among the coolest of travelers.
Please feel free to connect if I could be of any insight.