This is what hostelling used to be before it got all boutiquey. There are literally hundreds of dorm beds available here, and they're cheap as buttons if you're willing to take a substantial ride to one of Kraków's residential areas (tram 20 to 'Mały Płaszów'). Rooms are clean, as are kitchens for use by guests. Also a more central, but slightly smaller (only 50 beds) location, just across from the Podgórze footbridge at ul. Sokolska 17 (tel. +48 12 345 57 85).
