Is the hostel ABTA bonded?
If it is, you should write another letter to the hostel, giving them a further 21 days to respond to you, otherwise you will contact ABTA for them to proceed on your behalf. This may spur them into action.
Can I ask what exactly you want? Compensation? If it is the full amount you are expecting back, I'd be extremely surprised (it's almost unheard of to be honest) if you get 100% back.
Personally- considering your expenditure was only �42 i wouldn't proceed beyond a 2nd letter to the company. These things can drag out for quite a while and in my opinion, for �42 it just isn't worth it.