Some of us see our place of staying as part of our image. One of my friends will never compromise herself down to stay anywhere else than a three star hotel. Or she would just cancel her vacation. She just cannot imagine herself sleeping in a room with five other people. Or sleep at all knowing that her luggage will be left unattended. The fact that most hostel rooms are furnished with a security camera does not console her fears. Although she is no heiress to some rich dynasty and she does not owns gadgets other than her smart phone. All her baggage comprises is beach wear, some party tops, several flip flops and sandals and her makeup.
Still she freaks out about having people around her in a room.
I, on the other hand, find it ridiculous to spend a fortune over a room which I hardly have to stay in for a few hours each day. Traveling to me means exploiting the opportunity to the extreme by staying out and experiencing the new place by all possible means. I travel on a tight budget and like to spend money in exploring the place rather than running my account dry on some luxury bed.
A new place requires money to try new foods, clubs, drinks, etc. You have to spend on transport. You have to keep a decent enough buffer amounts saved in case you get a cold or something worse out of eating out all the time. So I always prefer a nice hostel room over any overrated hotel.
If you are a first time traveler in Thailand, hostels can be easily found as there are many hostels in the city.