The palace backpackers was one of my top two in New Zealand. The place was fully booked every night we were there and they had to keep turning people away.
The staff are awesome, they go out of their way to help you and are easy to chat to about everything. There's a great social area that unlike some doesn't close outside and inside with super comfy sofas. There's an outside sitting area, an inside dining room and then a tv room which is quieter as not to disturb guests. Breakfast (cereal, bread, fruit if you're up early enough!) is free and sometimes you can grab free food from the bakery around 5pm each day but it goes fast so you have to be quick.
The kitchen's pretty big and is well equipped with spices, pots, pans, cutlery, plates etc.and the double rooms are clean and huge. There is also a spa pool outside that closes at 9pm and they have zenbu wifi (pay per 50mb) but if you sit upstairs on the balcony or down at the bottom of the garden, you can grab Macdonalds wifi for free.
The place itself is 10 minute walk from countdown (food shopping) 5 minute from New World (food shopping) 5 minutes from town shops and about 20 minute walk to the gardens and to the park where the trek to the "centre of New Zealand" is, so great location!
The one negative is that the reception closes at 9pm so if you want anything after that you can't really get hold of anyone but they open at 6am.
I would definitely recommend this hostel but make sure you book in advance!
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