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When Passion Becomes A Business Venture - This Is The Story Of The Shophouse Hostel On Arab Street

To many, Arab Street is known for its hipster vibes and understated eateries.

But there’s a side to Arab Street that a majority of us Singaporeans aren’t familiar with – the bustling hostel scene that welcomes tourists of all nationalities and budgets.

One of these hostels is The Shophouse, located above the very popular cafe/burger bar (working title).

I first stumbled across the reception of The Shophouse when I was meeting a friend at the cafe.

Not knowing that the counter that first greeted me was that of the hostel, I quickly realised the brochures and standees weren’t of the menu – they were a mix of information and maps.

Image Credit: The Shophouse

It was only after perusing the situation a little longer that I figured that it was the counter and entrance for a hostel – one that I admittedly never knew about, in spite of being a big fan of hostels during my travels.

I was curious to find out more about the hostel scene in Singapore, which, one can argue, is being overshadowed by the influx of local Airbnb listings.

Thus, I got in contact with Mustaffa, co-founder of The Shophouse, to find out more about the business of running a hostel in Singapore.

Meet The Shophouse Team

Mustaffa reveals that the inspiration for starting his own hostel came from his own hostel-staying experience when he was travelling as a budget-watching, globe-trotting undergraduate.

“My first hostel experience was by chance, when I was in New York. The hotels were expensive so a friend of mine told me to check out hostels.com. I booked a bed and stayed in a dorm with other guests. They invited me out for dinner and these strangers eventually became friends. It was an interesting experience so from then on, I stayed in hostels whenever I travelled.”

Image Credit: The Shophouse

But while reality dictated that he needed to come back to Singapore and settle down, his love for hostels still burned on.

“I knew I couldn’t travel forever, so I decided to bring the travellers to me instead – by opening my own hostel.”

This was when he reached out to his friend and eventual co-founder Calvin, who “decided to jump on board” his suggestion.

Without any experience in actually running a hostel, the duo did their homework in the most hands-on way possible – by working at existing local hostels to get a feel of the business’ operations.

“It started off with just Calvin and I. We were actually doing shifts at the hostel when we first opened – Calvin did the opening shift, I did closing.”

They have since recruited more staff on board to cope with their growing customer base – a manager, full-timers, a team of part-timers, and The Blackhole Group, that handles HR, Marketing and Admin matters.

The Shophouse team

Opening The Shophouse

Having opened at the tail-end of 2012, Mustaffa shared that The Shophouse was launched during times when staying at hostels wasn’t as mainstream as it is now.

“When we first opened up The Shophouse hostel, there weren’t many existing ones in Singapore. It was only two years later that the hostel scene flourished. On top of that, Airbnb started becoming popular, so that changed the dynamics of the industry giving travellers more options.”

Image Credit: The Shophouse

As for its rather strategic and central location, Mustaffa revealed that it was actually “by chance”.

“We did survey potential places in many areas – Little India, Chinatown, and Clarke Quay to name a few. 48 Arab Street was the last property that we decided to check out before we wanted to give up on the plan of opening up a hostel. It happened to be the perfect property, so we proceeded.”

And what about (working title)? Did it precede the hostel, or vice versa?

“[The cafe] was actually an unexpected venture. Based on rules and regulation of the Urban Redevelopment Authority, the first level of the Shophouse can only be used for retail or F&B. Thus we converted the first level to (working title) as an in-house cafe for the hostel guests to chill out and have breakfast downstairs. Soon it converted into a cafe for the public.”

Image Credit: The Shophouse

But as expensive as rental for shop space is in Singapore, Mustaffa shared that the hostel was built using all of his and Calvin’s savings, after failed attempts to get a loan from various banks.

Revealing the figure to be around half a million, the duo also attempted to save more money by sourcing for beds at warehouses, and fixed them up by themselves to avoid assembly charges.

Finally, in December 2012, The Shophouse was open for its first batch of stayers.

When Guests Become Friends

A dorm / Image Credit: The Shophouse
A private room / Image Credit: The Shophouse

Closing in on 4.5 years of operation, I asked Mustaffa about some of the more memorable stayers that he had:

“Well… I’ve hosted a few international criminals before in The Shophouse. Without our realisation of course. I even hung out with one of them at the rooftop and we had a lovely chat. It was only after he left that the police came and did investigations!”

In general though, he shared that most guests tend to come from England, Australia, Germany, and Indonesia.

The very intimate relationship that comes with a limited number of guests at any point of time also helps him and the team create even stronger bonds with them.

Image Credit: The Shophouse

“I’ve forged friendships with many hostel guests from all parts of the world. I’ve visited some of them when I travel to their country and was welcomed warmly.”

Overcoming The Odds, And Making It All Worth The While

Image Credit: The Shophouse

A leap of faith for both Mustaffa and Calvin not just in terms of putting all their savings on the line, the duo experienced firsthand how tough running a business was.

“It was a steep learning curve for us – operating a business, managing guests, creating a system and service recovery. But once we got the hang of it, it has been pretty smooth. Now, we have five entities (and counting) under The Black Hole group.”

The Black Hole group was set up as a collective of lifestyle brands, and they currently have 5 entities under them – The Shophouse hostel, (working title) Burger Bar, Afterwit Mexican Taqueria, The Mad Sailors British Kitchen, and Of Mice And Men coffee caterer.

“Challenges are part and parcel of a business so we take it as an opportunity to grow.”

But even with the challenges that lie ahead, Mustaffa still finds that it’s all worth it in the end.

“There are days where people come up to me and said “This is the best hostel I’ve stayed in my entire life” or “This is the best coffee I’ve had in a long time”. The feeling is great but there is certainly more than that. The idea of The Black Hole creating an ecosystem where this platform can be used for more greater things such as giving back to the society.”

“We Do Have Offers For The Hostel To Expand Internationally”

Image Credit: The Shophouse

As for their future plans, Mustaffa reveals that he plans to “stabilise all entities before expanding beyond Singapore”, in spite of already having offers for them to expand internationally.

“For The Black Hole in general, we hope to build up a solid team of “suckers” (*what they call their team members). It’s due time that Calvin and I focus on the bigger picture of expanding our entities while passing down our responsibilities – we used to handle everything from finance to logistics to marketing – to the rest of the team so that they can train the newer staff.”

With their businesses tied closely to 2 large and growing markets – the millennials with wanderlust and those with a penchant for cool cafes serving Halal food, this is probably not the last we’ll see of these serial entrepreneurs.

The Shophouse Hostel

48 Arab St, Singapore 199745