Perched on a hill above the town, this former hotel has been converted into a top-notch hostel. Dorms have two or four beds; all but one of the private rooms have an en-suite bathroom. Head up to the large dining room for awesome mountain and sea views (the bar's open from noon to 11pm). Wi-fi's in the common areas only.
To get here, continue from Upper Gate St onto Sychnant Pass Rd; the hostel's up a long drive to the left.