I hear you, Syoust. However, consider this, as snark mentions from time to time (but he does a better job of it):
Virgin doesn’t sound like an airline name, Amazon doesn’t sound like a online “shop of everything” name & even “W” doesn’t sound like a luxury hotel brand.
Before those names existed, a lot of arguements could’ve been made for not using them. But brand positioning- done right- made those names fly.
I think your luxury hostel concept is a great one. Do it justice by exploring names that may, at first, seem out of its realm.