Hi Andouille. Welcome to the Forum, and congratulations for the upcoming opening!
Your guests will probably thank you for using higher quality materials and a higher thread count. It's a big investment, but one that directly affects your customers' level of comfort.
Some countries require bed linens to be white so that they can be bleached and sanitized. If you're allowed to use them, colored linens can contribute to the decoration of your rooms and the overall character of the hostel. Darker colors will do a better job of hiding set-in stains.
All colors will eventually fade, but since it's a gradual process you may not even notice it until you buy a new one and compare them. I had no idea how much our old pillow cases had faded until we bought bright new ones. Yikes!
You will need to replace your linens from time to time. They will eventually get stained, frayed, develop holes, and generally look worn out. We bought some relatively expensive sheets when we opened the hostel and they held up remarkably well for five years. Most sheets will not have such a long life, though. Maybe 2-3 years? The more sets of sheets you have the longer they will last, because each set will be used and washed less frequently.