Ah the great "hostal" debate! I love it! Well MM, it seems to me that Websters would agree that the word "hostel" should not be used to translate "Hostal", as neither of the two meanings it gives are the meaning of Hostal. Obviously the first (main) meaning is that of "Albergue" (youth hostel). The 2nd meaning - inn - means a traditional place which serves food and drink but which can also provide accommodation (I think "Hostelry" is actually what they have in mind.) The appropriate Spanish translation of inn is "posada". So unless you intend the title of this thread to mean "Inns and other accommodation", I think you should at least change "hostels" to "hostales".

Not that I want to be pedantic or anything ..