Bed down pilgrim-style on futon in tatami dorms (sleeping up to seven) at this hostel, a handsome old building that used to be a pilgrims' lodge. It's attached to and part of Reiun-sō ryokan. Find it midway between the top of the cable car and Musashi Mitake-jinja, about a minute beyond the visitors centre.
It's a good idea to choose the two-meal plan, or you can pay separately for meals (dinner is ¥1240).