You do not need an Ordnance Survey map and a grid reference to reach the Youth Hostel Association's latest hostel; just hop on a number 33 bus from Piccadilly. And when you reach the gleaming rotunda at the entrance to the redbrick humps which comprise the new hostel, you could be in for another surprise. "We don't greet you with a room key in one hand and a loo brush in the other," says the hostel manager, Ian Hampson. No chores await the first hostellers waking up in Manchester this morning.

Purists who insist on reaching the hostel under their own steam could arrive by canoe, since the junction of the Bridgewater and Rochdale canals is right outside the front door. The new hostel is anchored in urban archaeology, at the heartland of the Industrial Revolution. As well as the world's first canal, the first-ever railway station is 100 yards away; it now forms part of the Museum of Science and Industry. The other aspect is filled with the detritus of development: a railway viaduct (listed, and on sale for £1); the Mancunian Way, 10 times busier and 100 times uglier; and the Metrolink, hi-tech technology using a century-old line.

Inside, £9 per night (or £6.50 for under-18s) buys a lot of mod cons. The rooms are airy and spacious, even when filled with six interlocking beds. Each room has a bathroom, and two rooms are kitted out for disabled guests and their helpers. Depending on bookings, a number of rooms will be available for couples and families; thequick-fit system of installing and removing beds means configurations are easily changed.

Ping-pong has given way to pool as part of the the YHA's modernisation, and the pool players share space with television viewers and the hardy self-caterers. If you prefer the easy life, the dining room looks out over a panorama of decrepitude. Now the industry has gone away, this area is called Castlefield Industrial Heritage Park.

At the building next door, the rejuvenation is further advanced. The Castlefield Hotel looks like a fully functioningbusiness hotel, and charges 10 times more for a single room than the lowest rate for a hostel bed. Yet look closely, and you see it is owned by the YMCA. Inner-city accommodation is a growth area for all sorts of youth organisations.

If the Manchester hostel is a success, the YHA is likely to repeat the exercise in other cities where it is unrepresented, such as Liverpool. Both Liverpool and Manchester have thriving independent hostels, which could be hit by the competition. At Joan's Place, in the shadow of Manchester United's stadium, guests are delighted with the amenities, ambience - and the absence of chores. But the hostel is rarely full, even though it has only 15 beds. With Manchester not yet attracting hordes of tourists, the 150-bed hostel could take away business from its smaller rival.

Manchester Youth Hostel, Potato Wharf, Castlefield, Manchester (0161- 839 9960).

Joan's Place, 10 Hornby Road, Old Trafford, Manchester (0161-872 3499).