If you aren't fussed about being in the center of town or you dig a little nature with your hosteling, this newcomer tucked away in a residential neighborhood 5km outside Pucón is a good option. The purpose-built hostel is steeped in native hardwood – a wood-carved bar, wood-carved sinks, reclaimed-hardwood staircase banisters etc.
The common area has a bohemian, Zen-like vibe and it's easy to real fall asleep in the forest hammocks that surround the building. Dorms come in 4- or 8-bed configurations and there's a big sociable bar and kitchen.