Most people dont stay at the Hippie Island partly because there are not much staying option and partly also because you will find a lot of hippie crowds there. If you can roam around and come back that would be great.
Hello Anjana,
You'll find several backpackers hostels and homestays in the Hippie Island part of Hampi. The Goan Corner, Shanti Guest House, Baba Cafe Resort are some of the best options. Otherwise, you can always choose to stay in Hampi/Hospet, where you'll find more options!