Mention the word 'hostel' and more people than you'd think will recall Eli Roth's 2005 film, Hostel. If you haven't seen it (or forgot because it was completely forgettable), American males stay at a hostel in eastern Europe then get drugged, kidnapped, and tortured. Terrifying idea but this will extremely likely not happen to you. In the movie, it didn't even happen because they stayed in a hostel so stop being foolish and have some great times staying in some great hostels.
To me, hotels are all pretty much the same so I'm here to advocate hostels. I think they are excellent forms of lodging and wish I'd known about them at a younger age.
There are certainly positives and concerns about hostel life:
Positive: Location. If you visit most major cities (except New York, which I find odd), there will be hostels in or near the center of the city and most of the main tourist attractions.
Positive: Employees. Most hostels I've stayed in have been run by competent, interesting, English-speaking staffs. Many lay out pamphlets of places to visit and will show you exactly how to get wherever you want to go. Many employees are also travelers who want to share and listen to others' stories. In fact, sometimes hostels employ travelers temporarily and provide lodging in exchange for minor work such as cleaning or laundry.
Positive: Price. A bed in a hostel is cheaper than a hotel room, period. Staying in many downtown hotels could cost you more than five times the price of a hostel. Also, hostel room prices usually don't change because of a weekend or holiday whereas many hotels charge more during these times while offering nothing extra.
Positive: Socializing. I socialize best when simply thrown into a mix of people. For example, thirty minutes after arriving in Budapest, I was at some rooftop bar with a dozen strangers who were also staying at the [hostel]. Don't expect something like that every time, but whether you go alone or with a group, you'll find people in hostels to do activities with. And if not, the hostel will point you toward a tour company to go kayaking, museum-hopping, bar-crawling, and whatever else you want to do.
Positive- Self-reliance. Most hostels have kitchens. Check in, find the local grocery store, and return to make yourself a meal. Make some extra to share for some nice socializing opportunities.
Positive: Mystery. Every hostel has the same idea but is unique in presenting it. Some focus on art or music while others have bare walls. Some have many free showers while others have only a few pay-showers. Some are in buildings while others are in [VW vans]. For me, this sense of mystery adds to a trip. I could check in to a four-bed room that I'll share with one other person or a twelve-bed room that's full.
Concern: Sharing a bedroom with strangers. This seems daunting and I was skeptical at first but it really is not a big deal. Most people stay in hostels to be near activities and save some money, like you'd be doing. It's highly unlikely that anything of yours will get stolen unless you flaunt it or leave it in a common area. Many hostels have some sort of lockers so bring along a padlock and you can guarantee the safety of your belongings.
Concern: Sleep quality. Sleeping in hostels can be an issue for people, as it has been for me. Inconsiderate people are everywhere. Hostels have quiet hours, but that doesn’t stop some folks from talking loudly, playing music, going in-and-out of the room at all hours, etc. It can't really be helped and usually isn't worth risking a fight so your best bet is to put in some earplugs and roll over. Some beds can be small or less-than-comfortable so have a plan to use clothes as padding or whatever else might help. If you're really concerned about sharing a room, many hostels have rooms with few beds or even just one, though prices often increase as the rooms get smaller.
Concern: Sharing a bathroom with strangers. Alright, this is a turn-off. Waiting to relieve yourself or shower can certainly get annoying. But most hostels with competent staff will have clean bathrooms so get up a little earlier or time your shower for the middle of the day if you can.
When planning a trip, I usually go to hostelworld.com and choose a hostel in my desired location that has a rating of 80% or above. Some hostels have a maximum age limit but that practice has gotten rarer. I've never had a negative hostelling experience, though a good friend did get peed-on while sleeping so don't think it's all roses. But that was just a drunk person doing something idiotic and not the hostel's fault. And now it's a funny story!
How hostels work: Check-in is typically like hotels, around 3 or 4 o'clock. How much of an introduction to the hostel you'll get varies- some include a tour and sit-down about the city while others will simply go over a few rules and point toward your room. Hostels I've stayed at have had 24-hour access but I know some lock their doors at certain times so find out about and consider that before you book. If the hostel has a bar, you'll usually get a free welcome drink and/or a discount for staying there. Hostel bars are great for meeting people before going out or after a long day of experiencing the city. Before going to your room, you'll get a clean bedsheet and pillowcase. Most hostels have bunk beds and sometimes you'll be assigned a bed, sometimes you get to choose. Either way there will be a duvet blanket on it. Make up the bed however you want (which direction to face, duvet under or over, etc), say hi to your roommates, and go explore!
Here are pictures from cool hostels I've stayed at: