The hostel is basic and there's no two ways about it. Yes it's cheap, so cheap that my friends and I got a private room each. But I feel that the hostel could charge more and then update the decor and facilities and also offer more of a substantial and welcoming breakfast than just a pot of jam and a loaf of bread.
However, the staff were extremely friendly and helpful. Nothing was too much trouble for them. The location is also great. In central Sandakan and it felt very secure.
The hostel does what it needs to do if you need a cheap place to stay.