The latest update I found:
Eli Roth recently spoke to "Production Weekly" about his work on the upcoming horror sequel HOSTEL 2. One of his main focus points for the sequel seems to be having a direct continuity between both films.
He mentioned "I want it to feel like the movie is going to pick up on the next cut, as if you could watch the two movies back-to-back and it would be a three-hour movie. There will be some new things thrown in there but it has to look and feel like that movie."
"Hostel 2" will focus around three female protagonists and unlike the first film, will start off dark and creepy and remain that way throughout.
He further mentioned that the bulk of shooting will take place in The Czech Republic starting September though he intends to also shoot in Rome and Slovakia "if they let me back into Slovakia" (the original was set in Slovakia and the country didn't take too kindly to being featured as a nation that hosts sadistic torture establishments). As soon as Roth's done with HOSTEL 2, he'll go straight into his adaptation of Stephen King's CELL with production on that set for spring 2007.
Well in theroy it would work, but they need to add a few new things and keep the basis the same. But well Hostel deserve a sequal yes, but if it turned out crap like most sequals could spoiler the name.
But well what made Hostel good was its unqiness in the way the horror was placed such as the cutting off of tyhe toe by them cutter things etc, did bring in good box office ratings though.
Can't wait to hear the plot of this film though.