This hostal is very simple, no frills, but the location at the beginning of Calle del Arenal is 1/2 a block from the very center of Madrid, the Puerto del Sol (PdS). For those Americans sensing the cravings, Burger King is right below it, McDonald's and KFC are a block away. We tried a Mexican restaurant one night, a Thai restaurant another, a Korean restaurant another and Spanish restaurants 3 times - all within 2 blocks of the hostal. Where Calle del Arenal hits PdS there is a subway entrance, stairs and elevator - your gateway to Madrid.
One night we were serenaded by a 40+ voice choir singing "Deep in the Heart of Texas" in four-part harmony, three floors below our window on the street, making the experience surreal. The next night we were entertained by a political rally whose repeating cry was "Madrid won't consume Coca Cola!" Every night there were Russian violinists playing underneath our window, and they were concert hall quality!
There are an abundance of small souvenir stores on the street, and around the corner is El Corte Inglés, the largest dept store chain in Spain, which also sells souvenirs along with toiletries and other items. There is a great chocolate place 2 blocks up the street, on the right and another on the left. There is a pharmacy 2 blocks up, and another 2 streets over. The only shortcoming on location is that you cannot get there by car. Your cab will drop you 2 or 3 streets away and you can walk down Calle Arenal to the hostal.