There are no hostels in Trevelez but there are other types of accommodations...

"Beautiful century old, one, two or three bed roomed fully fitted alpujarran style apartments in Trevelez, the highest village in Spain.
Nestling on a mountainside, the apartments overlook a gorge with a trout river running through it. The village has a wealth of shops, bars and restaurants, yet retains an unhurried timeless atmosphere!
Two or three bed roomed self contained apartments.
All apartments are on the first or second floor and command spectacular views of the gorge.
Bed linen...