I loved staying at this hostel, as it had an awesome vibe. The hostel and town were like something out of Totoro. It is a nice quaint area and the hostel embodies this. The staff and owner bent over backwards to make us feel welcome. It was during the world cup, so they put all the games up on a projector. I loved everything about the place in terms of vibe and comfort for a hostel.
The only negatives really are that you need to check in quite early - by 10pm I believe. This can be troubling, as the train service from Oita is anywhere between 70-80 minutes, and has limited trains.
This would be a perfect place to stay if you are not worried about timetable, but was a bit rough with me having quite a tight schedule. This all said I would definitely love to visit this area again if I had less of a planned schedule to follow.