I just got back from Spain and I thought I'd put in another good word for the world famous
Hostal Chelo . This was my 5th or 6th stay there over the past 8 years and I've never been disapointed with my choice. For those who are looking for inexpensive lodging option in Madrid, whilst benefiting from a superb central location Chelo should fit your needs. I've stayed in all kinds of lodging in Spain over the years from Albergues along the Camino de Santiago to upperend Hotels along the North Coast, and I find the cost-value relationship at Chelo to be at the top.
I understand Hostales/Pensiones may not appeal to all travels, those with deep pockets or those who visit Spain for the first time on their dream trip will likely choose a more traditional hotel, but for those who need a cheap clean room in a great location choose
Chelo .
Saludos,
Shawn