--Make a reservation.
--Find out what amenities your hostel offers. Odds are it will offer some, be it free towels or clean sheets or something. This will allow you to cut down on unnecessary items.
--Shower shoes. I know you said you are taking sandals--make sure you can wear them in the shower
--A quick-drying camping towel. Your towel is just going to take up too much room, and it's likely that your hostel will provide towels.
Also, instead of toilet paper, pack some unscented baby wipes. They're a lot more useful, and are less awkward space-wise.