Can I just stay in a hostel and eat from the gorcery store?

To make a rational decision, more information is necessary, such as: How much does the hostel cost? Does it have decent beds? Distance from hostel to the place of workshop. Local food costs. Etc. (Don't forget to include facts like if you sleep in a different place than majority, you deprive yourself of opportunity of some morning/evening informal chat.)

Generally: how much would I really save by "hostel & grocery store" and how much would it reduce my gains from the workshop?

Speaking for myself, I would like to cut some costs (together with the cost of flying it makes my salary for 2 months), but there is always a risk. Once I slept in a hostel with beds so bad that I really did not sleep much that night. Now if I imagine 9 such nights plus jet lag, and the resulting effect on my concentration and memory, I would get much less benefit per dollar spent.