Stayed here for three nights as a base to explore south Iceland. Big place with many rooms (50ish?). Kitchen was excellent: huge space, four separate induction cooking surfaces, two fridge/freezers, nice coffee maker. Never felt crowded to be in kitchen given it's size. Plenty of separate WCs and showers: rarely had to wait for either. Rooms were very dorm like.
Quiet hours mostly followed; quiet enough to sleep even though many people/full capacity. Although "hostel", most people there were 25+. Not a rowdy place as some hostels can be.
Our biggest issue was that our room was v moldy and smelt like wet socks. Probably due to fact it was next to showers. We kept the windows open most of the time there and that helped a bit. This was really our only complaint about this location but it did mean we didn't want to spend any time in our room other than sleeping.
Finally, we did find Skogar to be a good base for exploration: much more laid back and not overcrowded compared to Vik but not that far from it in a car (25m). Can easily walk to Skogafoss (30m), Kvernufoss (25m), and museum (5-10m). We would probably stay here again but ask to be located further from the showers in case that was the issue with our room.