If you are looking for an inexpensive yet excellent Hostel in Quito, check out Colonial House Quito. Just a few blocks south of old town (el centro), sights and the Mercado are within walking distance. Yet it is quieter than hostels right in old town.
The hostel owner, Dante, is very helpful, as are his helpers. They helped me call the airport with my questions. Dante arranged a last-minute tour with family friends, as other tours were booked. It was a little outing to the Cotopaxi National Park, an experience no big tour could provide. Breakfast (low priced) was awesome, and there nice, hot showers.
He arranged airport transport at $5, usually a $8 taxi ride. You can get picked up at the airport if you provide flight info. He'll call a taxi for you for other outings as well. He has particular drivers who work with him. He can also help you with bus transportation.
It is a hostel, and thus bathrooms are shared. (There are some rooms with privae baths available.) There is comaradarie with travelers from around the world. A shared kitchen and common living room facilitates this.
The place is clean and I always felt my belongings were secure. Paddlocks on outside of door when you leave for the day. He even let us lock baggage in the office for free when we returned to Quito a week later and had 6 hours layover until our next flight! It was overall delightful and I highly recommend it!
(also laundry service, TV, discounts for long stays, Dante speaks English)
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