There is only one true backpackers hostel in the Northern Highlands (Nicaragua): CafĂ© Luz in Esteli. Several upscale hotels and many, many simple, family-run budget ones. Those watching their wallets will get much more bang for their buck here than in more popular destinations, like Granada or Leon. Although occasionally there are water and electricity glitches in Northern Highlands hotels, notably in the mining triangle, this is not something generally to worry about in the north, though hot water is a real rarity. The only time hotel reservations are necessary in the area is during a festival, when locals and tourists pour in from all over the country.