I'm opening a new hostel in Lima, Peru and before the grand opening (June 17th) I have listed my hostel in most of the most important booking engines and I'm about to finish my own website (www.happyuphereguesthouse.com - comments are welcome, just without pun intended ;) ) and we're recruiting some couchsurfers to test the services as well as the people that we can catch on the booking engines.
But the thing I have realized, and what you have most realized, is that word of mouth is everything. The thing is: how to get this word of mouth if you're just starting and nobody knows you???
And one idea I've come to mind, I don't know if there's already a threat about this (I'm also newbie in the forums stuff), is to make some sort of "Joint Venture" with some other hostels who are looking to increase their bookings and also to "bypass" the booking engine, creating between all of the members a "Referral Chain" where each hostel is going to promote the other members hostel destination (of course no competition in the same geographic area should be allowed, for the business sake).
I'm working on right now contacting the places where I have stayed when I was backpacking (Medellin, Macchu Pichu and Salvador de Bahia insofar; the others where party animals hostels and my business is not going straight in that way - my neighbours would close my business the second day xD) and I would enjoy to hear from you if you're quite interested in the model I'm proposing right now.
I'm a true believer in the power of "the sum of all parts" if you focus in the strenghts of each member, as our not so well known friend, John Nash, in his Game Theory proposed (as a sinthesis of course): "if the stronger players support the weaker ones, the result will be the strenghten of both in order to achieve their goal".
I'll be waiting for your propositions.
Best regards to all!