Madrid - Where to sleep? -

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First things first, I need to highlight and important decision all travelers  need to make: Hotel or Hostel. While each have their own merits, the choice will certainly come down to individual tastes, habits and budget.
Below, I've listed a whole range of options to suit the needs and bank accounts of a wide range of travelers.

HOSTELS:

-          Hostal “Gran Via 59” en Calle Gran Via 59
Great central location, well priced, clean, and has wifi included

-          Hostal “La Prensa”  en Calle Gran Via 46

-          Hostal “Los Amigos” en Calle da Arenal 26
This hostel is rather famous, however, it is important to note that it is located on a very noisy street; during evenings featuring “la movida madrilena” it is nearly impossible to get any sleep. Not to mention, there is a nightclub just opposite contributing it’s share of noise.

Here is a useful site to search through hostels and budget hotels: www.hotelius.com

HOTELS:

-          “De Las Letras” en Calle Gran Via 11
Very centrally located, modern, and in my opinon, an excellent compromise. More often than not, discounted rates are available

-          Room Mates
Is a chain that various hotels in Madrid, all very well appointed; modern and well maintained. Oscar Hotel is one of my favorite!

As for which neighborhood to stay in, I recommend the Gran Via because of it’s location relative to the nearest metro and the city center. Just keep in mind that no matter where you stay in Madrid, there will never be peace and quiet at night. After all, the Madrilenos famously only have dinner past 10pm.