HI - Valdivia - Airesbuenos Hostel could be great, but somehow stays only somewhere in between.
We visited when the lower floor was under construction (what used to be a garage was being transformed into a space to host yoga classes and other activities for visitors).
The location is absolutely great -- it's two minutes' walking from the main town square, less than five minutes' walking from the riverside and the famous fish market (where a tourist information office and several tour and boat operators are also located), and five minutes' walk to and from the main station, which is the entrance point into town for most travelers. The place is easy to find, and if you have ay doubts, there is a helpful tourist information counter at the bus station, with maps and a lady who can easily tell you the way to the hostel. Due to its central location, the hostel has plenty of restaurants and all kinds of shops around, including the big shopping mall in town, with department stores, hypermarket, and cinema halls.
Rooms and Bathrooms
You can choose between dorms and private rooms. The first floor includes three different dorm rooms but only one bathroom to serve them all. The upper floor has several private rooms (doubles and twins) with their own bathroom. Linen, towels, and liquid soap are provided in all of them. There is central heating, but in the cold weather, it is not as strong as it could be, making it necessary to wear many layers of clothes even indoors. The space is kept clean but daily cleaning of private rooms is not provided unless you request it.
The common spaces of the house are quite charming, although not very spacious. The kitchen is very well equipped with plenty of utensils, pots and pans to use. If you wish to cook meat, fish, or fry, you must use the outdoor stove, by the yard. The yard includes some permaculture plantations and you can use the grown herbs in your own cooking. A pantry with a great variety of condiments and other basic ingredients is also available -- if you wish to use it, you may leave something for other travelers to use or make a small monetary contribution.
The dining and living room are cosy, with several couches and sitting areas. There is a big TV and DVDs available for movie night, as well as a computer for guest use. Free Wi-Fi is available in all areas of the house. Breakfast is healthy and fulfilling, including brown bread, butter, spreads, great coffee, milk, and a small serving of fruits with granola and yogurt.
This is a convenient place to stay while visiting Valdivia, but for the amount you must pay, it could easily provide more comfort (better towels; daily cleaning of rooms; and particularly, better heating, which is really necessary as the weather can get really cold).