the
hostal macarena is for my money, the best hostal in madrid. the building is completely renovated, beautiful glass elevator, 24 hr desk, marble floor bathrooms, hairdryer, toiletries, cable, they even have soft music in the hallways. the balcony rooms are very nice, they look out on cava san miguel off of the plaza mayor. beautiful!! as lizzie mentioned,
aerocity is the best option to go back to the airport.