I stayed at Hostel Amigo for three nights in January, 2008. I paid a bit extra (something like 150 pesos per night, or $15 CAD/USD) to have an all-girls room with an attached bathroom. The room actually had four beds but there was only myself and one other girl in the room, so it was nice to have that privacy (and that bathroom!). A breakfast, including the "eggs du jour", is included in the price. On the main level there is a bar and lounge area, with very cheap drinks and loud music. I really appreciated that the hostel was strict about everything quieting down at 1:00 am, so if you need a good night's sleep you don't have to worry about the bar noise. The main floor also has a large luggage storage room and three computers with free internet access. In addition, the front desk is great at arranging tours and their Teotihuacan package is great: for about twenty dollars (200 pesos) you get transport in a very comfortable mini-van to the Plaza of Three Cultures, the Basilica of Guadalupe and Teotihuacan, as well as lunch at a short stop at a gift shop. Book your tours in advance as space is very limited.
The hostel is located a few blocks south of the Zocalo, on Isabel la Catolica. There are lots of tourist attractions nearby, but not too many good restaurants. A few blocks up the street towards the Zocalo is an amazing bead store that is a must-visit for anyone who makes their own jewelry- prices are about 50-70% lower than in Canada.
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Address: Isabel la Catolica 61, Mexico City, Z.C. 06000, Mexico