I think an efficient drying room is essential if you're running a hostel in the Highlands, especially if you are in an area that is popular with walkers and climbers.
Our drying room is a small room within the hostel main building, which is on the main central heating, so it is warmed whenever the central heating is on. It also has a dehumidifier (totally essential). For it to work effectively the temperature has to be at least 20 degrees, or moisture doesn't evaporate off the clothes at a fast enough rate.
I can't comment on your individual circumstances, but often outdoor buildings aren't well insulated enough to get warm enough - too much of the heat is lost through drafts and lack of insulation. I'd imagine it's not practical to move it into a smaller room in the hostel. The only thing I could suggest would be putting insulation in the existing drying room and also making it smaller so there is less volume to heat.
Ours is about 3mx2m, so not a big room, but enough on most days, and we cater for lots of walkers who are often wet. I'd say a small sized room that gets warm enough is better than a large room that is too cold. We also have a clothes dryer people can use, but obviously this is no good for outdoor jackets and boots. The only time we have real problems is when we haev canoeists in, but that's almost impossible.