Some managers think flyers are out of date, costs too expensive (internet ads are cheaper) and it is hard to feedback the efficiency. I say it is NOT.
You can use your flyers EFFECTIVELY if the partner hostels HAVE flyer-racks (lots of them don't!!!), recommending your hostel by the reception, and you have a good distribution in the neighboring cities. When I mean good distribution, you probably have to promote your hostel personally, building up a good relationship with the partner hostel, and on a regular basis. If you take the efforts to make an offline marketing campaign, the flyers are the best investments on the first round. ;)