Hosteria Ailen is far from the city center, but consider there's a bus stop across the street and taxi is not expensive in Ushuaia. The hostel is simple ok ... but Miguel, the host, will make you feel like in your own house, give you a key of the front door and help you with phone calls and tours. Breakfast consists on juice, bread, marmalade, coffee, milk, yougurt, some cereal and ... delicious argentinian "creme de leche" ... need more?
Miguel, our host, was very helpful in every way possible! He even made a personal call (local) for us on his cell phone. He also offered to make reservations for us to take an excursion to the National Park. He does not speak English, so all communication must be in Spanish. The hotel was nice, clean, and comfortable and the breakfast provided for us in the morning was a typical light continental breakfast. It mostly consisted of croissants (medialunas), bread rolls, cereal, juice, yogurt, and coffee. There's a bakery across the street, and a convenience store and take away store not far down the road. However, this hotel is located an hour long walk away from city center. It's in a strange neighborhood populated by stray dogs and front yards littered with junk (as typical in Ushuaia).
If you don't mind a long walk or $7 USD taxi ride into town, then this could be the place for you.
Also, make sure you pay in cash (USD) at the end of your stay. There is a charge assessed for using a credit card.
This place is nice and clean cheap hotel, but some issues you should be aware of. First of all, it's very distant from city centre. The bus stop is just in front of the hotel, but it still takes about 20 mins to get to the downtown. The owner doesn't speak a single English word, so communication is bit difficult. Moreover - they oficially accept credit cards, but will try to force you to pay in cash.
Ok, so I agree this is a nice place but it's far from perfect. If you speak Spanish, or claiming the money on business expenses, then it may be better. Neither my partner nor I did.
There are points where this place excels. The views to the Beagle Channel and Chilean Andes were stunning from the lounge. And the rooms are lovely and clean.
But there were certain things I didn't like.
The location is right on the far outskirts to the West of Ushuaia. This meant we were heavily reliant on taxis or remises (the latter are slightly cheaper in Ushuaia).
There is a midnight curfew. We got some stern looks for staying out beyond this time. This is quite difficult in a country where some restaurants don't open until 10pm and bars until midnight.
I don't mind leaving the odd tip (even if I prefer the Iceland's stance where tipping is not necessary or expected). What I object to is being told in order to use the free services I must leave a minimum tip. If the tip is compulsory then it is a charge, not a tip.
You have to pay the cost of 30% of your stay or 60 US Dollars online to confirm your booking. This has to be done online. The the policy of the company is that if you pay any of your booking by card, a 4% fee is applied to the entire booking. Therefore the room is always going to cost more than the quoted price.
Finally, what I really didn't like was being told on my last day that they would no longer accept payment by card and I would have to pay US Dollars cash. This is despite none of the cash machines dispensing them (there are machines which will but are not filled regularly out of tourist season). This meant we lost out on the trip to do the Train at the End of the World because we had to spend ages trying to get US Dollars.
Our agreement was to pay US$ 60 per night. When we tried to pay we were being charged US$70 per night.
Overall it's not a bad place and the owner is friendly enough, but I did leave there feeling more than a little peeved.
I stayed here for 3 nights recently on a trip to Tierra Del Fuego and Patagonia. We booked it online after finding it on the tourist site for the region, and found a very quick and courteous reply confirming our reservation. I was initially put off by the odd payment requests listed on the website (which suggest payment 30 days prior to the stay), but was allowed to pay once I arrived, so don't let that deter you if you simply ask them if you can pay by credit card ahead of time or cash when you arrive.
The hosteria is very, very clean, and newly renovated. From what I understand in conversation with the owner, it opened in 2007, so it is not run down like most of the places in Ushuaia look. It has an absolutely breathtaking view of the mountains and the city from one of the rooms, the television/computer room (free internet), and the breakfast room. We ended up staying in two different rooms (he moved us to the room with the view after our first night!), and both had new bathrooms with AWESOME showers and no lack of hot water.
The owner is a very nice guy, and always had a smile on his face while we tried to speak to him in our horrible spanish (he doesn't really speak english - but not many people do in Ushuaia to begin with). He is a genuinely good person, and I wish him all the luck in the world. We left to travel into Patagonia, but had a flight out of Ushuaia, and purposely made it back to the Hosteria Ailen in order to give him our business - and he gave us a hug and was very happy to see us! He accommodated our late arrivals and early departures without a problem, and tailored what time breakfast started (very light - toast and pastries, coffee, tea, juice) around our schedule if we were getting up a bit earlier. He also let us use his kitchen to cook a cheap and mess-free dinner one night.
The hosteria is a bit off the beaten path, which means it is either a 10 peso ($3) cab ride from downtown, or a 40 minute walk. It is such a cool walk with the mountains and the side streets that we walked every day. A benefit of the location is that you don't deal with noise from people partying downtown.
If you are not into the "corporate" hotels, I would highly recommend the Hosteria Ailen...I'd say anyone who wants a cool experience at a unique and cozy place should look into staying here. I've stayed in A LOT of different hotels from 1/2 star to 5 star all around the world, but this is my favorite hotel without hesitation.