When guests arrive at hostels, sometimes their plans have changed, or the hostel is not what they expected. What would you think about allowing guests to change their minds, and giving them a refund if they decide it's not the place for them? They would have 1 night/24 hours (or less) to change their mind, and they would get a refund minus the one night they stayed. If they booked a week, then the refund amount could either be the remaining 6 nights in full, or the refund could be 6 nights at the non-discounted rate, if that makes sense?
I think it would be a great feature for the hostel to have, and would probably give the hostel a boost.
Another way of doing it is similar to HostelWorld's 'Cancellation Protection', where if they pay an extra 10%, or $/£1 a night (for example) at the time of booking, they can get a refund of the above.