The Palace Hostel is a two-pearl hotel located in a residential area of San Juan about a 20-minute walk from Condado Beach. The hostel’s nine private rooms and dorms are as basic as it gets, with beds, air-conditioning, and not much else. The atmosphere is welcoming enough and the shared kitchen and terrace are nice features for budget-conscious guests. However, extra perks that one might associate with hostels, such as organized social events and free breakfasts, are noticeably absent. And worse, there isn't any hot water. Budget travelers could consider comparing rates with Posada San Francisco, which is better-maintained and offers fantastic city views from its patio.