Youth tourism is one of the fastest growing type of tourism in the global tourism. The notion of "youth" used to include persons aged between 14 and 21 years old, yet, due to age limit extension, this notion currently includes persons aged between 15 and 34 years old. The age limit extension is primarily due to the fact that an increasing number of persons both in their late twenties and in their early thirties still think of themselves as youth and opt for the lifestyle typical of youth. World Tourism Organisation (UNWTO) assesses that 20% out of 940 million international tourists travelling the world are primarily young travellers. As a result of increasing demand, as well as the presence of new hostels throughout the world and hence also in Zagreb, this paper analyses this specific concept of tourism facility. Moreover, contemporary tourism has been described as one of the fastest growing economic sectors in the world, and the same applies for youth tourism both in the world and in Croatia, in accordance with the Development Strategy prepared by the Ministry of Tourism of the Republic of Croatia. An overview has been provided of the main features of youth tourism. Hostels have been defined as primary facilities for youth accommodation and the key differences between hostels and hotels and their main features have been provided, as well as trends in hostel business. After the presentation of five best hostels in the world, a comparison has been made through five parameters: location, hostel accommodation/offer/ target groups, accommodation capacities and prices. The final section provides a definition of the Croatian Youth Hostel Association, as well as the mission and vision of the Association and its business licence. In the end, a conclusion has been reached that Zagreb-based hostels keep abreast with the trends in hostel business and are striving to expand and specifically target their programmes in order to be on a par with those at the global level. Furthermore, the importance of youth tourism has been confirmed and recommendations for the improvement of hostel business in Zagreb have been provided.