While hostels and coach class are both considered “budget”, the benefits of the former far surpasses what even 5 star hotels can hope to offer to the backpacker type of traveller.
The idea of staying in dorms and sharing bathrooms is simply unacceptable to some, but if this isn’t an issue, hostels are definitively the best way to travel as a backpacker in terms of cost, experience and value. Even for flashpackers with an unlimited budget.
Despite the huge cost difference between hostels and traditional hotels (which is around 1/4), you will get much more. On paper, hostels seem to be the same as coach / economy class airplane seats – cheapest available option with no amenities. While hostels and guesthouses are basically the least expensive form of paid lodging, most have a very specific and “unwritten” complimentary amenity that makes staying at them a vital part of travel backpacking. This built-in and community driven amenity is, well, a community.
A community of like minded travelers from every corner of the world that often have an instant bond and social connection with each other regardless of the language barrier or cultural differences. You can’t get that at a $2,000 a night hotel, but you can get that in the same city at a hostel in London for $20 to as low as $5 in other countries.
Most people who are about to start their gap year or round the world backpacking trip that have never stayed at a hostel / dormitory style lodging are turned off and reluctant to stay at them but will force themselves to because of the low cost.
The first hostel experience may be a bit uncomfortable because of the open and social nature of them but around the second or third night, that is often the very reason why backpackers come to love hostels.
Luxury is a matter of perspective. Most people think luxury is simply paying more for something or when they get loads of extra “stuff” they don’t need. But to the mindset of a long term independent traveler(backpacker), hot showers, clean bathrooms and free Wi-Fi are the luxuries of an accommodation.
That is a beautiful perspective to have.
A backpacker’s motto could be summed up as “Travel longer, farther and cheaper.” Cheap plane rides are essential to this but rarely looked forward to, whereas cheap beds at hostels are often the highlight of travel not just because of the cost but the experience.