On trend with the recent onslaught of attractive hostels, the freshly renovated Valencia Lounge Hostel doesn’t look like a typical European backpacker hangout. Located in a converted early 20th-century residential building in El Carmen—a neighborhood in the Old Town area of Spain’s third largest city—Ana Milena Hernández Palacios and Christophe Penasse of locally based Masquespacio infused an eclectic and cheerful design into the property, which consists of 11 bedrooms, a living room lounge, and a kitchen.

The owner of the hostel—a longtime fan of the duo’s work—tasked Masquespacio with updating the communal spaces and each of the bedrooms without changing the beds, infrastructure, or four shared bathrooms. “Normally, our designs are more conceptual and minimal, although the hostel required a different approach,” says Hernández Palacios, adding this was their first project of its kind. After studying the types of guests who stayed at the hostel, and determining that they tended to be young, the team created spaces that “make the visitors dream about a home designed like their room at the hostel,” she adds.

Rather than focus on a cohesive theme, each room is designed to appeal to a different type of person—a musician, surfer, nature lover, or artist, for example. Bright colors—shades of blue, pink, yellow, and orange—are combined with natural fabrics and graphic patterns designed by the firm to create an atmosphere that feels contemporary yet homey. The building’s original features, such as plaster moldings and cement-tiled floors, are maintained throughout. “It was a priority for us to transmit a cozy feeling—to create a warm and welcoming atmosphere,” says Hernández Palacios.

Charged with completing the project in only three weeks while the property was still open to guests, the firm produced everything in-house, including lamps, tables, and decorative items (chairs are the only exception). The duo used readily accessible materials including plastic, raffia, and wood for the lamps; natural fabrics for some of the headboards and cushions; paint, vinyl, posters, and cords for the graphic patterns that are both framed and applied directly to the walls throughout; and hardware store-bought items such as rope, chains, nails, and screws.

Says Hernández Palacios: “We created a fresh and modern design in an ancient environment.”