SSIDs in 802.11 protocol are defined as 0-32 byte octets. It is indeed possible to "hide" your hotspot and the process is as simple as setting 0 length SSID in your beacon frames. According to the protocol, clients should not show SSIDs with "null" or "zero length" names.
Regular routers have that option in their control panels as "Don't broadcast SSID" or "Ignore broadcast SSID". By hand the same can be achieved by looking for the following in your hostapd files:
# Send empty SSID in beacons and ignore probe request frames that do not
# specify full SSID, i.e., require stations to know SSID.
# default: disabled (0)
# 1 = send empty (length=0) SSID in beacon and ignore probe request for
# broadcast SSID
# 2 = clear SSID (ASCII 0), but keep the original length (this may be required
# with some clients that do not support empty SSID) and ignore probe
# requests for broadcast SSID
Read more about hostapd at gentoo wiki and its configuration here