The Prague Heaven hostel has very clean, spacious rooms, all serviced by an elevator and the friendliest staff imaginable. It's not located downtown, but is in a very authentic neighborhood very near the Vysehrad castle, a lovely area with a massive park on a hill overlooking the Vltava River and downtown Prague.
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Trams and metro each run directly to the city center, and the location is serviced by night trams in the off hours. Bring Czech crowns in cash?-- no credit cards accepted here.
This hostel is very new and clean with extremely friendly hosts. Well-furnished with free internet access and microwave. Utensils and cutlery are also free for use. Although breakfast was not included, they served us daily complementary bread and tea/coffee. Only complaint was the lack of toilets. There was a full bathroom with a bathtub, shower area, two sinks and a WC, and another toilet with only a sink and a WC. If the rooms are full there'd be a long queue for the shower. But the toilets are clean and spacious. I would highly recommend this hostel to any budget travellers.