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Hostels:

Cocunuts (1800 065 696):
Nelly Bay Road
This establishment promotes itself as a party hostel but can actually be a bit quiet at times. Film night seemed to be a more popular theme when I was there. Kitchen facilities are quite decent and the bathrooms (communal) are huge so never fear of waiting for a shower to be free. Accommodation comes in the form of A-shape huts which are small huts in the letter's shape. They sleep eight people. They have no air conditioning which can be a problem as Maggie can get very hot. Be wary of wild possums breaking in to pick at your food if the rooms aren't securely locked. Beds in A-shapes sleeping 8 cost $15 per night

Geoff's Place YHA (1800 285 577):
40 Horseshoe Bay Road
This hostel has similar accommodation to Coconuts in the form of A-shape huts, again with no air con. The bar here is fairly average, as is the food in relation to scram served at other hostels. Situated at Hoseshoe Bay, which is a good distance from Picnic Bay where the ferry arrives/departs, an hourly bus service is provided. This hostel has a lot of wildlife in the near surroundings (geckos, chickens, peacocks etc.) so stay away if you don't like animals. Bathroom facilities are communal but not the cleanest. Dorms sleeping 4/8 cost $17.60

Maggies Beach House (1800 001 544):
Pacific Drive, Horseshoe Bay
The newest backpackers on Magnetic Island is a place where the partying from the bar can sometimes go on throughout the hostel. Apart from that facilities here are good with an internet cafe, nightly movies on the big screen and a tour desk. When building this hostel more emphasis was put on fitting travellers in than giving them space - dorms are very small and a bit cramped. Beds in dorms sleeping 6 cost $21 a night