We were very impressed with Hostal La Compania. It is a very relaxed place right next to the Plaza de Armas. It is a hidden gem in a great location. We loved being so close to everything.
We also loved our large, comfortable room. The bathroom in top condition was also a plus.

Very beautiful place, nice rooms, hot water and a great location. Breakfast wasn`t very good, but the rest of the hostel was great.

Found this place by its website (http://lacompaniahostal.com/moran/) and had no idea whether it would be good, but we loved it! It's on Moran just a block away from la Compania church. Our room was bright white, spacious, and sunny with reliable very hot water (although the shower curtain wasn't really long enough so it was impossible to shower without getting the whole bathroom wet). We could here a fair bit of street noise on a Friday night, which didn't bother us but if you're sensitive to that this might not be the place for you. The reception area was really pretty and we could use their internet for free. Breakfast was simple but lovely, and included fresh squeezed juice. The staff was very friendly, although their english was pretty limited. This was me and my friends favorite hotel of our peru trip (and we were staying in places with a similar price point the whole time). Here we paid $40 american per night in October and it was well worth it. It felt homey...I'd love to go back to Arequipa and if I do I'd stay here again.

I originally booked a single habitacion for 3 days and was pleasantly surprised by the modest but very spacious rooms, extremely hot showers, and great location near the plaza de armas. However, by the end of my stay I left feeling much less satisfied. First of all, the rooms got very cold at night and the blankets weren't really sufficient...breakfast was very sparse, just white bread toast and some jam.. not that great compared to what I heard was available at similarly priced hostels from fellow travelers. Additionally, while I speak fluent Spanish, Gonzalo had very limited ability to communicate with some other English-speaking travelers that were there, and I had to translate for them.

But really the hostel itself was fine. What really bugged me was that when I found out there was a nationwide bus strike on my 2nd day, I tried to cancel my reservation for the next 2 nights and Gonzalo tried to convince me that there was not going to be a strike and insisted (forcefully) I stay. Despite having explained that I talked to several tour guides that said I needed to leave Arequipa that day if I wanted to make it to Puno in time for a reservation that was previously booked. Gonzalo, after about 20 minutes of arguing with him, said he would give me 50% of the next two nights deposit back (I paid for all 3 nights up front)... actually first, he claimed that I had stayed 2 nights already, when I had only stayed one. My friends at the Casa de Tintin (which they loved) had the same situation and were given 100% of their deposit back.

When he went to get my 50% deposit back, he claimed there wasn't enough change in the drawer and shorted me by about s./ 6 , not much, but he was very rude about it.

There are much better places to stay in Arequipa.. I booked the hotel because of what it looked like on the website, but it is really just mediocre compared to other hostels I saw while in Arequipa. Additionally, Gonzalo is very sketchy and if something unexpected comes up, don't expect him to be very helpful.

Also, luckily I left Arequipa before the strike which happened exactly as the tour guides said it would. If I had taken Gonzalo's advice, I would have been stuck in Arequipa for about 5 days.