Europe has always been equated with luxury, but hostels have become the best way for travelers to experience boutique-style treatment, with enough money left to explore the city they are staying in. In addition, most hotels are run by locals and even families, providing a comfortable accommodation and an authentic experience when traveling abroad.

1. Soul Kitchen, St. Petersburg - link here

Russia is known as an expensive Neo-Baroque city, but friendly hostels make this luxury destination a possibility. This hostel, with dorm rooms starting at just $16, features brick-walled rooms and an assortment of beautiful vintage furniture and hanging lamps. Some rooms even have their own fireplace. This family-run hostel is located in an old building in the heart of the city, near the hermitage and St Isaacs Cathedral making it easy to get around. Staff also welcome guests with a local concoction consisting of chili sauce, cherry syrup and vodka to get started on guided trips to bars and flea markets.

2. Celica Hotel, Ljubljana - link here

This hostel is unique for having been an old prison building redefined into a luxury hostel experience. According to The Guardian, over 80 artists around the world collaborated on this effort and it features an art gallery, café, restaurant, and restored warehouse buildings used as even spaces. Dorm rooms at this one-of-a-kind designer hostel start at just $20.

3. Sir Toby's Prague - link here

At just $10 a night, this hostel is one of the cheapest luxury accommodations in Europe. An old favorite for backpackers visiting Prague, it is an old house in the alt music and art district of Prague. The hostel also has a great cellar basement pub, a lush back garden, solid wood floors, and lounges where one can meet fellow travelers amidst retro furnishings.

4. Lavender Circus, Budapest - link here

With the city known for its soulful Bohemian vibe, this 19th century boutique hostel features vintage furniture and accessories scattered around the hostel, giving travelers a feeling of stumbling upon an eccentric collector's personal home. According to Hostel World, each room was designed by graphic designers, painters and sculptors, and at just $15 per night, it is a solid steal since there is always free tea and coffee in the common room.

5. Cocomama, Amsterdam - link here

The best thing about this hotel is its "Tight A** Tuesday" nights where $3 can buy you dinner, wine and loads of great company at their kitsch garden kitchen. A tall building that once served as a brothel, the family running the place has restored it with an old school glamour feel and lets their cat Joop warmly greet travelers coming in.