According to my experience, hostels allow to put up flyers and posters for free. They usually have a wall or a desk separate for this. They just wanna know what you are advertising, and it should be relevant to the guests. Recently, I distributed my own flyers in all of the hostels in Cusco, and almost all of them allowed me to do it for free. However, you can still ask money from your advertisers just for the distribution. You could even just send the flyer online to the hostel, and ask them to print it for something small in exchange.