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Compared to Stockholm and Copenhagen, the hotels in Lisbon are relatively inexpensive, but for the budget traveler they are still very pricey. Fortunately there are many hostels in Lisbon that not only make the city affordable, but also add some fun and an easy way to meet other travelers to the equation.

For the visitor, Lisbon is a very compact city. It’s said that it’s one of the many cities to be situated on 7 hills, but all the main attractions are located on the two hills near the river and the valley in between them. There are Lisbon hostels in different neighborhoods throughout the city so it’s important to pay close attention to your area before booking.

The hill to the west is where you’ll find the Barrio Alto (high neighborhood) overlooking the central valley area. This is where you’ll find many of the city’s famous restaurants featuring Fado singers as well as much of Lisbon’s best nightlife. It’s a moderately-priced neighborhood and it’s very central so this would be an ideal location if you like to be close to the parties in the evening. It’s very easy to visit all the main attractions during the day no matter where you stay, so it’s often wise to choose your Lisbon hostel based on what you’ll be doing late into the evening.

The valley below the Barrio Alto is the center of the city with all the high-end shopping and hotels. This is the most central location for everything, but the bars in the neighborhood tend to be expensive and/or touristy. If nightlife isn’t your thing then the city center is probably the best neighborhood.

The hill on the eastern side of the center has the main castle on top and the neighborhoods just below are full of winding streets and interesting little bars and restaurants. Any hostel boasting a location near the castle is centrally located and worth checking out.

The further north you go in the center the more suburban you get. You might be able to save a few Euros by staying in a Lisbon hostel that advertises that it’s “close to the center by public transportation” but you’ll end up wasting a lot of time going back and forth. Lisbon does have a great trolley system and a few funiculars and even an elevator that make getting around fairly easy, but the center is all very walkable so it’s worth paying a bit more to be in one of the main districts.

The Alface Hostel Lisboa is located in Barrio Alto so it’s a great place if you are interested in Lisbon after dark. They have beds in 10-bunk rooms starting around €18 with beds in 4-bunk rooms only 2 Euros more. They also have a few private twin rooms with shared bathroom starting around €25 Euros per person, which is a great deal for privacy and this location.

Travellers House is located in the center valley area so it’s super convenient to all the main tourist attractions. They have bunks in their 4 and 6-bed dorms starting around €18, and they also have private twin and double rooms for a bit more, making this another standout in the Lisbon hostel scene.

Hostels in Portugal (Lisbon)