I took a group to Spain last year. Madrid will be your most expensive accommodations. I can make a suggestion for Madrid. There are two hostals at the same location that, together, can accommodate a group your size. One is EXTREMELY nice for the older members and one is a very comfortable one-star hostal that would be fine for the younger people. Both are located on the 3rd floor at C/ Arenal 24. One block north of the Plaza Mayor. A wonderful location in the heart of Old Madrid. There is an elevator.
The VERY nice place is Hostal Mayrit. Phone: 91 548 04 03
Double with private bath is 55 Euros
Triple with private bath is 75 Euros
The one-star place is Hostal Peralta. Phone: 91 548 40 24.
I neglected to record the price of rooms at the Peralta in my notes. But it was very cheap. Some rooms have private baths. Some don’t. There are two clean bathrooms in the hall. It is directly across from Hostal Mayrit on the same floor.
Mayrit is slightly more than you say you’d like to spend per person. But combined with the much cheaper Peralta you will be close enough to your per person budget. Also you will likely be offered a group discount. I was offered a group discount without even asking.
You can make reservations at both places by calling either one as I think the owners are related. I made reservations for both by contracting with the Mayrit.
Another idea for the younger people is Hostal Mirentxu Phone: 914 29 81 84. On C/ Zorrilla 7 3rd floor. Simple and clean. There is an elevator. Very exciting area near some great flamenco bars and tapas bars. Very safe and quiet street. Double with shower is 35 Euros. Triple with full bathroom is 55 Euros. Best bang for the cheap buck you are likely to find in a Madrid Hostal.
Website:
http://anas.worldonline.es/hmirentx/ Mirentxu is a 30 minute walk from the Mayrit. If you’d prefer to keep the “yunguns” closer I can recommend a very cheap Youth Hostel close to the Mayrit. About 3 blocks away. EXTREMELY basic accommodations.
Los Amigos Backpacker Hostel is located at Campomanes 6. 4th Floor. Phone: 91 547 1707. Dorm rooms with lockers for 15 Euros per person includes breakfast. A fun place for young people to meet other young people from all over the world.
www.losamigoshostel.com