1. The Winston Art Hotel and Hostel, Amsterdam, Holland
With 40 unique rooms styled by local Amsterdam artists, the Winston wouldn't look out of place on the cover of Wallpaper* magazine. More memorable design themes include bondage, ultra violet and vodka, plus another with life-size robots hanging off the walls. The PVC room even comes with rubber sheets. The beer garden overlooking the comings and goings of a popular red light alleyway may not be everyone's cup of tea, but the complimentary access to the famed Winston Kingdom nightclub next door makes it a steal.
st-christophers.co.uk/amsterdam-hostels, from £12 a night
2. Euro Youth Hotel, Bad Gastein, Austria
This vintage hotel has been given a new lease of life as a hostel with tidy dormitories for small groups: in other words it isn't cheap simply because you're sharing a room with a dozen or so other backpackers. The beer cellar bar stocks some of the heartiest ales from both Austria and Bavaria (it's only 90 minutes from Munich), while the restaurant serves the oh-so-starchy kartoffelbrot, a hefty potato bread. All rooms have spectacular views of the mountains, the nearby Felsenbad Hot Springs Spa and the Eldorado Dorfgastein paragliding platform. The Euro Youth is also an integral part of a local ski run, with a lift 20m away from the front door. Discounted ski equipment can be hired directly from the hostel.
euro-youth-hotel.at, B&B from £12 a night. B&B with ski/board and boot hire from £19.50 a night
3. Mosaic House, Prague, Czech Republic
This gleaming new hostel – it opened this May – blends boutique backpacker accommodation with the facilities of the on-site four-star hotel, including a funky bar and an unrivalled location, a short walk from the Charles Bridge. Housed in a former theatre, it has been redesigned incorporating several green features; the airport shuttle runs on cooking oil left over from the restaurant downstairs, they have the Czech Republic's first grey water recycling unit and a super-computer automatically adjusts heat levels in the rooms based on the number of people it detects.
mosaichouse.com, from £7 a night
4. Balmer's Herberge, Interlaken, Switzerland
Balmer's Herberge was Switzerland's first youth hostel and it's full of helpful freebies that turn an Alpine trip into a stress-free dream. This boutique base is a two-hour train ride from Zurich and straddles two great lakes. It offers travellers private lodges, free bike tours, complimentary Wi-Fi, and paragliding tuition, and the receptionists can arrange trips to the mountain tops where you can eat fondue in outdoor hot tubs, watching the sun set over the glacier fed waters of Lake Brienz and Lake Thun. Staff can also help biking enthusiasts attempt the infamous Interlaken-Faulhorn-Meiringen cycling challenge.
balmers.com, from £14 a night
5. The Village, London, United Kingdom
This central London hostel near London Bridge is not boutique by any measure but it is dirt cheap, and the little-known Belushi's comedy club at the back attracts a number of big names, all eager to test drive new material on an international crowd. Michael McIntyre, Jo Brand and Lenny Henry have entertained budget travellers here over the years. Famed DJs of yesteryear, like Dane Bowers and Boy George, even play the adjoining basement bar. Throw in a few chandeliers, a location a few minutes' walk from the London Eye and a female only floor, and there you have it: a bed in zone one for little more than a tenner and all the entertainment you can handle.
st-christophers.co.uk, from £11.90 per night
6. St Christopher's Hostel, Newquay, United Kingdom
This cliff-top retreat favoured by surf enthusiasts occupies a great spot above Towan beach. People stay here just for the bargain surf tuition, but if you don't fancy a dip the hostel still has plenty of bonuses, not least the panoramic bar overlooking the Atlantic. The hostel is also a convenient base for exploring the area, such as King Arthur's Tintagel Castle and the nearby Eden Project. Prices increase during peak season and summer weekends, but even then a dorm bed won't break the bank.
bedsandbars.com, from £10 per night. The Escape Surf School (escapesurfschool.co.uk), surf packages from £60 a night (two nights' B&B and two surf lessons).
7. Yoho International Hostel, Salzburg, Austria
All bargain beds come with certain conditions and at Salzburg's Yoho it's The Sound of Music – playing on loop at reception, 24 hours a day, seven days a week. Singing nuns aside, this is a hostel where you wake up to awe inspiring mountain views, chocolate box chalets and the caffeine-laced aroma of street-corner breakfast bars. The complimentary shot of Vogelbeer schnapps always goes down a treat at the bar, and bargain hunters will love the €3 all-you-can-eat dinnertime buffet. The organised mountain tours of Wolfgang Lake, an hour away from Salzburg, give visitors a rare close-up of the space-age Red Bull headquarters, for a heavily discounted rate. Just ask at reception.
yoho.at, from £14.80 a night
8. Oasis Backpackers' Mansion, Lisbon, Portugal
This secluded little hostel is on the Miradouro de Santa Catarina, a hillside spot with great views over the Tagus river estuary. The proximity of Bairro Alto, known as the Soho of Lisbon, might not be a plus point for everyone – but the top nosh served up at the patio garden restaurant has universal appeal. The staff at this mansion conversion also dish out free Portuguese lessons, complimentary Wi-Fi and Skype phones, not to mention directions to nearby beaches yet to be marked on the tourist trail. Oasis also throws in a laundry service for good measure: they may even iron your socks if you ask nicely.
oasislisboa.com, from £12 a night
9. Cat's Hostel, Madrid, Spain
Cat's Hostel is in a 17th-century palace in the centre of Madrid, a few minutes walk from the botanical gardens and the buzzing Puerta del Sol square. Depending on the season, £12 will bag you a bed in either the four- or 14-person dormitory, plus a plateful of complimentary paella on Saturdays and free beer on Wednesdays. Another big draw at Cat's is the mosaic-tiled courtyard at the heart of the hostel: a popular spot where travellers relax on the giant pillows that surround the fountain, bubbling away under the stained glass ceiling.
catshostel.com, from £12 a night
10. The Pink Palace, Corfu, Greece
This is a rare find on the European hostel scene. Imagine a hillside dotted with olive trees overlooking sandy Agios Gordios beach, where crystal clear water shimmers in the tranquil bay. Now factor in a balcony attached to every room, free breakfast, a complimentary three-course dinner every evening, an open-air Jacuzzi and a free transfer service between the hostel and Corfu Town, 15 minutes away. Finally, bear in mind that there's a private beach two minutes from your bed,and all for under £15 a night. Any downsides? The Pink Palace is the only hostel on our list to be overtly "for the kids", and it books up fast.
thepinkpalace.com, from £14.80 a night