The Independente Hostel, Lisbon:

The city is arguably the best in Europe for the budget-savvy traveller, with five of its hostels ranking in the top 10 hostels last year according to Hostelworld.com customers. The recently opened Independente is keeping up the good work. Situated in a former Swiss Ambassador’s residence, and run by three brothers as a meeting point where “travellers as well as locals can come together”, it boasts original architectural features and vintage design pieces. Eleven modern dorm rooms provide lodging, while four private suites are available for those seeking more privacy. Guests can dine in style at the hostel’s Decadente restaurant where, for as little as €10 on weekdays, you can try their fixed price lunch menu. In the evenings opt for the “dinner with the staff” – a sumptuous buffet from €7. • theindependente.pt , from €12 (£10) a night