Google localized search and hostels

I've been noticing lately that Google is focusing more on delivering localized results.

Here is a search for the keyword hostels from an IP address near San Francisco -- notice that result number three is for a lighthouse hostel near San Francisco, result number four is for a hostel in Berkeley (the nearest city), and number five is for HI's San Francisco hostels website. This is the most customized that I've seen the search results.

(screenshot attached)

I think this will definitely have an effect on how Web searchers find hostels' websites...