I highly recommend Green Forest Hostel to anyone backpacking or traveling in Yangshuo. The staff were incredibly friendly and helpful, rooms, beds and common areas were clean and showers had hot water. What more do you need when on the road? I stayed here with a friend, in a mixed five-person dorm, for five nights.
If I should pick any downsides, I'd say the traffic noise from the street (Diecui Li) carries pretty well indoors (our dorm was at the street side of the building and windows are not the best ever), but I always wear earplugs when sleeping in a dorm anyway, so it didn't bother me at night. Also, when we arrived to our dorm, it was freezing cold, but they turned on the AC and we got some hot air in the room, so it was manageable. The beds have thick (clean) blankets too, so no problems with cold during the night.
The hostel is fairly difficult to find, although once you make it there, their location is great. Don't try finding the place by it's street address however, because the entrance is not on Diecui Rd, but instead, follow down the pedestrian street Chengzhong Li and just before the end of it, start looking left above the street level shops, and you might (just might) see the Green Forest Hostel sign. If not, ask anyone nearby, but be warned: there's a lot of locals that would love to guide you there, but they will definitely charge for it. The hostel entrance is on the third floor and to access it, you must first go through a small street level shop selling all kinds of touristy stuff. Don't be put off by the very shady (to say the least) staircase leading to 3rd floor; once you get through the hostel's front door, it's a different world up there. Good luck!
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