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1. Lisbon Lounge Hostel, Lisbon

A consistent #1 Hostel In The World winner, Lisbon Lounge is just about as perfect as everyone says it is. It’s the backpacker equivalent of a prom queen in a stripper outfit, with everything that every traveler dreams about down below.

Lisbon Lounge decadence

The building looks like it was designed by Ian Schrager. The common spaces are just plain decadent. The rooms are big, with plenty of room to spread out.

The designers took great care to use old parts of the building in the modern design — big, empty fireplaces still remain in rooms and give them a “homey” feel.

You might pooh-pooh the pretentious aspects at first, but I highly recommend you give in to them. For the extra money you’re spending, let yourself enjoy the DJ playing chillout music and the mojito bar in the corner. Go on, you slept in that shady place with ants last night. Tonight, you’re a queen.

I paid: €17

2. Goodnight Hostel, Lisbon

The most whispered-about hostel in Portugal, this is a traveler’s favorite. Perfectly located in Baixa Chiado, the Goodnight Hostel is several floors of adorable design and friendly faces.

The main room is the kind of place that people love to congregate in, and yes, the party can go late.

The owner is a 30-year old with loads of travel under his belt, and it shows. He’s thought about the annoyances that some hostels can bring and avoided them.

Forgot your towel at the last place? Two euros will pick you up a brand new one.

The fridge is stashed with all kinds of drinks, with juice and tea set out for guests all day. The DVD room is so stocked that it made me want to move in for a week and do nothing but watch films.

Oh, and the first beer is on the house, always.

I paid: €14

3. Nice Way Hostel, Sintra

Open just one month, this place will be heaving by next summer. The two-floor hostel is a real charmer, with wooden floors and a fantastic communal room upstairs. It might also be the only hostel located on the premises of what used to be a daycare.

The owner (Pedro) is one of those guys who makes it all simple. He’s got a non-wiseass answer for everything and is eager to help. You get the feeling that it’s genuine and not a put-on for some early Hostelworld ratings.

Too many people come to Sintra for a day trip from Lisbon and hopefully the opening of this hostel will push more to spend the night.

I paid: €17

4. Peniche Hostel, Peniche

This surfer’s hangout is located on the second floor of a downtown building. Boards lie out on empty bunks and wetsuits hang in the garden.

Not quite couch surfing

Most rooms are deserted when the breaks are strong, then crammed with half-naked bodies when everyone is back from the surf.

The Peniche Hostel is small — my guess about 20 beds — and feels more like a house because of this. The party moves to the small living room each night.

Elbows bump as everyone tries to cook in the equally small kitchen. Nobody cares — it makes friends of people who might never have even met, which is one of the great intangibles in good hostel travel.

I paid: €18

5. Yes! Hostel, Lisbon

Surprising value for such a cheap bed! Big rooms with lots of bathroom space, fluffy mattresses and a happy, positive staff. The three large Macs are the nicest hostel computers I’ve seen — ever.

The common area is where most people hang out. Beer is 3 for 2 after 22:00 and many people take advantage of this while big-screen movies roll. The € 8 dinner is usually delicious and comes with three free glasses of *hiccup* wine.

I paid: €13

6. The Yellow House, Porto

This happy and hip hostel is owned by Saul Williams, guitarist for Britpop favorites James.

As promised, old dude

It sits discreetly on a side street and inside it has the look and feel of a small mansion.

The winding staircase leads to two floors of rooms, most with six bunks. The hardwood floors and high ceilings pack on the charm, as do the living room’s chandelier and the kitchen’s massive painting of some old dude.

Word is that this place is overflowing in the summer, with the back garden filling up with visitors looking to chill out and drink lots of wine. Ask Bruno nicely and he may make you some risotto.

I paid: €16

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Check out these articles for more pearls of wisdom on hostel dwelling:

How to Eat for Free at Hostels

The 20 Craziest Party Hostels Around the World

Hostel Sex: A Practical Guide for Backpackers

Hostel Love: Why Relationships on the Road Never Last

Do You Know What’s Crawling in Your Hostel Shower?

How to Make Your Hostel Less Hostile