Bay Lodge: Good hostel in Denham
The Bay Lodge hostel is a nice place to stay, just across the street from the sea. It was a former motel, so you still have a fridge and a tv in your dormitory :). There are six beds (bunks) to a room which doesn't leave a lot of space though. All rooms have aircon and ensuite bathroom.
There's a daily free shuttle bus to Monkey Mia to see the dolphins, additionally the managers organizes all kinds of other activities. Should you be lazy, there's a small pool on the premises aswell.