In an older house with character, steadily improving Hostal Dos Lagunas (Barros Arana 104, tel. 061/415733, doslagunas [at] hotmail [dot] com, US$14 pp with shared bath and breakfast) is fast becoming a travelers’ favorite.

In an off-the-beaten-sidewalk location, looking more expensive than it is, the immaculate Hostal Don Guillermo (O’Higgins 657, tel./fax 061/414506, US$15/26 s/d–US$45 d) is seriously underpriced compared to nearby competitors. Though the singles are small, some rooms now have private baths and the breakfast is excellent; rates vary according to whether the room has cable TV.

At friendly Residencial Dickson (Bulnes 307, tel. 061/411871, patagoniadickson [at] hotmail [dot] com, US$22–28 d with shared bath, US$37 d with private bath, breakfast included), look at the rooms closely—a couple have windows so small that they’re reminiscent of jail cells. On the other hand, there’s central heating, the beds are good, and the shared baths are numerous.

The comparable Hostal Bulnes (Bulnes 407, tel. 061/411307, hostalbulnes [at] hotmail [dot] com, US$28/37 s/d) has good beds in sunny rooms with shared bath only.

Its decor is tacky—the interior more resembles a house trailer than a house—but cheerful Hotel Blanquita (Ignacio Carrera Pinto 409, tel. 061/411674, US$28/37 s/d with private bath, breakfast included) is spotlessly maintained and often full.

Hostal Amerindia (Barros Arana 135, tel. 061/411945, US$40 d) is an artfully decorated B&B that may expand. New in early 2006, its major shortcoming is one shared bath for its three otherwise comfortable rooms, but remodeling should overcome this; it also has fast free Internet and even wireless Internet access.

New in late 2005, Hostel Natales (Ladrilleros 209, tel. 061/410081, www.hostelnatales.cl, US$20 pp, US$60 d) has transformed the aging Hotel Palace into warm, luminous accommodations with private baths; some rooms have two or four bunk beds, while others have standard doubles for couples. The lobby and atrium (which includes a fountain) are spacious and inviting, with comfortable chairs and sofas, but the rooms are sparsely furnished and sounds carry from the lobby (which is also an Internet café with balky wireless Internet) to the nearest ones. An ample breakfast costs US$5 extra.

Now a Natales institution, Casa Cecilia (Tomás Rogers 60, tel. 061/411797, www.casaceciliahostal.com, US$17/28–33/43 s/d) gets credit for improving accommodations standards here—it’s such a legend that, on occasion, nonguests even ask for tours of the hospitable Swiss-Chilean B&B. The rooms are simple, and some are small, but all enjoy central heating, some have private bath and cable TV, and the cheerful atrium is a popular gathering place. Rates include the usual sumptuous breakfast.

Hostal La Cumbre (Eberhard 533, tel. 061/412422, lacumbre_hostal [at] yahoo [dot] es, US$33/44 s/d) occupies one of the town’s better-preserved landmark houses, though it’s showing increased weathering.