Hostels are a cheap travel secret of budget travelers. They have been around in one form or another for a long time, and are oriented towards young travelers and anyone else seeking inexpensive accommodations. The U.S. version used to be more complicated, with guests helping with chores. They are simpler now. You rent a bed instead of a room, sharing the bathroom, living room and kitchen. Less privacy, but cheaper accommodations, and you get to socialize.
My first time in Quito, Ecuador I stayed at Centro Del Mundo, a hostel near the center of the area they call "Gringolandia." $4 per night included breakfast. I shared a room and bathroom with 4 others, and a T.V. room with guests from 14 countries, and channels in three languages. It was clean and comfortable, with a locking trunk next to each bed for valuables.
For 80 cents I could have a rum-and-coke brought to me while I played chess with a flower-buyer from Holland. The manager could arrange anything from $15-tours of the snow-covered volcano Cotapaxi, to $2-per-hour Spanish lessons. Friday nights the rum was bought by the manager, and there was a party out in the patio.
Is A Hostel For You?
Not all hostels are as much fun as the one I stayed at in Quito, nor would all travelers want that kind of place. I happen to love hostels, but most travelers won't. I like mingling with travelers from around the world. "Mingling," of course, could mean sleeping next to a snorer.
In a hotel you are more isolated than in a hostel, but a private room has its advantages. I'm sure the idea of sharing a room is too much for some people, as is waiting to use the shower. A hostel is definitely a different experience from staying in a hotel.
Even if they were the same price, I'd prefer a hostel to a hotel, but one of the biggest reasons people stay in hostels is to save money. For this, they're a good option when you're traveling alone. Since my wife and I travel together now, we don't stay in hostels often. You pay for two beds, after all, which makes hotels more competitive.
Some hostels do have private rooms. If you are not sure you like the idea of sharing a room, but you like the idea of a more social environment, ask about this. Sometimes you can even get a private room with a bathroom.
Hostels are not as common in the U.S. as in other countries, unless you include "bed-and-breakfast" places. These are somewhat like high-priced hostels, but with private rooms. Fortunately, there are still a few regular hostels in almost every state, and they are still a great alternative when you want alternative (and cheap) travel.