You can get a bed for $20 per night, not a bedroom! Generally speaking the hostel may have 12 or 15 beds in a room sharing one bath with one or two other rooms! $20 times 15 is $300 per night for one room (15 Beds) times 30 days equals $9,000 per month for that room!
Multiply that by 3, 4, 5 or more rooms (45 to 75 beds) is $27k to $45k per month.
Most of the existing hostels have owned their real estate (Building) for 20 or 30 years, they bought it when it’s value was significantly cheaper!
Yea, have millions of dollars and the ability to build bunk beds!
I just used NYC as an example. Still, $20 is the base rate, around much of the world, for youth hostels. The rates go up up up during special events. During NYE for example, a $20 bed in NYC can go up to $200. Probably all hostels move their rates up for those events.
Smart thinking. Jails are huge money makers. You could even use inmates as free workers.