Plot hole: In the nightclub scene where Josh is drugged before his is taken to the torture factory, Paxton is drugged too. That means he was supposed to be taken there as well, but he ends up locked in a storage closet for the rest of the night. The two girls working for the Hostel pointed out where the bathroom was for Paxton, so they would have known where he generally was. Hard to believe that they or anyone in cahoots would not try to look for him.
Plot hole: When Paxton runs to the changing room, he does so at the same time the two employees are turning, meaning they should have seen him. He also shuts the door to the room after they have turned and are walking straight. In addition he was covered in blood and left bloody footprints, therefore they should have caught him and immediately recognized him as an escapee.
Answer: Exactly, yes. This interaction tells him that the police are in on the operation, and will not help him.