Last time I visited Dubrovnik I stayed at a hostel. I was very satisfied with service (not to mention prices) so I will kindly share info with you (and hopefully save some money for those who are about to visit Dubrovnik):
The only (and I do mean it -only), located just outside the Old Town, some 20 minutes walking. The hostel has 82 beds, and terrace restaurant, membership kitchen, and TV room should be singled out from the hostel´s facilities.
You can contact hostel by e-mail: dubrovnik@hfhs.hr
For more go to: Croatian Hostel Youth Organisation

