It is very unfortunate that this is the only youth hostel in the key west (June 2012). When I walked in the male dorm I was very disappointed and actually wondered whether I was still in the US. Here are some of the problems:
1) The bunks were old made of wood and some were broken. Two of them were in this nasty old nook, which thankfully I didn't have to sleep on.
2) Expensive (around 40 a night) which in my opinion is not worth it. I've found way better places for around $20 a night.
3) Really dirty bathroom and when it rained it leaked so the entire floor was wet.
4) Beware of the pictures which were taken when the hostel was in its heyday. I don't think it's been renovated in a looong time. However I heard that they "might" renovate.
Sad to say, I could only last a night and since I couldn't get a refund I moved to a motel room ($100+ a night) which was decent, but again not even worth $100.
On the positive the location is nice, they have free parking and the staff was nice. However, in all honestly I would not recommend this place unless you have no other option. It is very unfortunate that this is the only hostel in key west so you kind of have no choice. Good luck if you choose to stay here.....More