While it’s immaculate and spotless, in an excellent neighborhood, the dorms-only Hostel Patiperros (Mirador 135, tel. 065/235050, US$9 pp) lacks the vibes of other Varas hostels—for better or worse. It might be exaggerating to call it lifeless, but something’s lacking despite new beds and glistening common areas, including a kitchen and dining room.
Puerto Varas  has several other plain but decent places, such as cozy Residencial Hellwig (San Pedro 210, tel. 065/232472, US$9 pp) and Hospedaje Sureño (Colón 179, tel. 065/232648, US$10 pp with shared bath, US$25 d with private bath).