The Travellers House is the best youth hostel I've ever stayed in! It is located centrally (3 minutes walk from the Plaza del Comercio), clean, nice, and with a generous and outgoing owners, for example, for New Years Eve they organized a beer-drinking contest to promote his "open bar" , a cooler full of beers that everyone could help themselves to. The decor of this place is fantastic and makes you forget the fact that you are having to share a room with 3 or 5 people in wooden bunks, and have a communal bathroom (which obviously is separated for boys and girls). I think they have a private room but I don't know what it costs or if it is hard to reserve and if it is usually always full. In the lounge, there are several nice sofas and beanbags and it is a space where you can hang out and listen to music or read one of the many travel guides at your disposal. There is also a nice kitchen that can be used, a large dining room and a lounge with computers and free internet. It is advisable to book a month or more in advance because everyone knows that this is THE hostel in Lisbon.
Hey: maybe going to hostels may seem like it's for rail-riders or broke college students (which, basically, isn't far from reality) but really if I'm sharing this hostel it's because I would recommend it to anyone. Moreover, you can find some of the best hostels in the world in Lisbon according to the trusted site Hostelworld, so it's not such a bad idea to stay in one of them on a visit to the city. Located in the neighborhood of Alfama (the nicest neighborhood in Lisbon), it's a typical Portuguese building, with its courtyard, the clothes drying in the air and its people walking around cheerfully. From reception to the kitchen, to the rooms, the decor is carefully thought-out, to capture the decadent vintage charm that is Lisbon. More: 16 euros per night including a complete breakfast, and it has a terrace with benches for eating lunch and/or sunbathing with the Tajo in the background. I wanted to stay and live there.