Hotels vs Hostels?

I've heard a lot about how cheap most youth hostels are, and I've stayed at one myself in Kyoto, but I've been doing some research trying to sort out a plan for a trip to Japan next summer, and it seems that many business hotels are not dramatically more expensive. Still, so many times on this forum and from other travelers, I've been given the advice to stay away from hotels. I'm planning to go with two other friends, and with Club Tocoo, I've found relatively nice places that go for about $40 per person per night. I've heard hostels run for around $30 per night. Is there some huge catch I'm missing with Club Tocoo? Or is it because triples just severely cut down hotel prices that I've been able to find such good deals.

In particular, I've been interested in:
Sumisho Hotel in Tokyo, which is 4088 yen per person per night in a triple. (plus 315 yen per person per night Club Tocoo fee)

Dotonbori Hotel in Osaka, which is 3900 yen per person per night in a triple. 315 Club Tocoo fee.

Can anyone confirm that Club Tocoo is indeed the real deal?

I don't know anything about Club Tocoo but I went on a low budget trip this summer and business hotels are often a good substitute for hostels. For example near the main station in my town Kobe some business hotels have singles for less than 5000 and just 2-3 minutes from the station. Hardly seems worth it to go out to the hostel except for the social part.

Personally I would say the social part is a giant benefit of staying in a hostel. For that reason alone I would chose one over a hotel.

If you're really going for cheap though, there are some shady love hotels that you could stay in, you pay flat rate for the room regardless of how many people are staying, and the rooms are larger than business hotels.

You might have to try to hide the fact that you're backpackers... but I bet you could pull it off.

A while ago I started a thread about my experiences at youth hostels. Check it out, if interested...

Japan Youth Hostels