I spent 2 nights in
Hostal Austria a couple years ago - and I think I had their best room. Their sister-hostel, the Hostal Viena, is located about 20 yards away on a side-street - which frankly looks dark and has only rare foot-traffic. When I walked by the hostel almost looked to be closed.
The Hostal Austria is well-located on the Cuesta de Gómerez, the road which leads up to the Alhambra but very near the Plaza Nueva. I'm pretty sure there's no elevator, either. The street itself, rather steep, is lined with gift-shops and other hostels. According to the Hostal Austria website, they have "5 beds room From 75 Euros" - but they don't say if that's in the Hostal Austria or in the Hostal Viena.
Read my
Granada blog entry from 2008 about my visit to Granada. During this stay, I had a single room at the modern (recently renovated), 1-star
Hotel Carlos V for 49 Euros per night - and they had Wi-Fi, an elevator, key-card doors, and great views of the city.
If interested, I've also stayed at the
Hostal Costa Azul and
Pension Veracruz.
Saludos,
GranadaMan
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