First off, on Hostelworld, TripAdvisor and other websites, the hostel is listed as "X Hostel Malaga…read more- Picasso's Hangout." Picasso is from Málaga and apparently the hostel is near where he was born.
I stayed here one night in May 2015. I didn't make a reservation since I was used to walking up to hostels, being able to check-in with no concern the hostel was booked up. Especially true during the winter and in the Balkans and Eastern Europe. I noticed the walk-up rate was €2 Euro more than the online rates. So maybe book in advance or book while you're at the hostel using their wifi :D
It's about a 30 minute walk from the bus and train station, but the hostel is in the city center. Excellent location near Plaza de la Merced, bars, restaurants, the beach. I was given a map of the city with places to visit and eat circled, and mention of a free walking tour in the evening. You can pay €5 Euro for the dinner which I did for convenience sake and to meet other people. They start the meals on time at 9pm (sun sets late here!) so when I arrived around 9:15pm, everyone had already started eating. The dinner came with a glass of beer and was a meatball with vegetables and tomato sauce and bread. It wasn't bad, and I met a few people.
There's a great rooftop terrace where you can meet a lot of people. The bartender was really awesome-friendly and made his own simple syrup! Since locals just use sugar in their drinks, and he couldn't find any simple syrup to buy. The mojitos and sangria were only €1 Euro! I ended up playing beer pong (clean version!) at the terrace and some card games. I missed playing "Ring of Fire," but it looked like tons of fun. I heard some funny, personal stories during that game!
Unfortunately the terrace closes at 11pm or midnight, same with the kitchen. But the bartender led others on a bar crawl which seemed like a good deal at €10 Euro considering what you got. Since I have Asian low alcohol tolerance and wanted to catch the morning bus to La Línea de la Concepción, I passed.
My dorm room was on the hot side, but I couldn't bother to turn on the fans. The hostel is on a busy street so definitely bring earplugs, mp3 player, sleeping mask so you can get some sleep. My room was full, but I only saw one other person in his bed when I returned to my room. The rest came back to the room late at night. Definitely a good place if you like to party and drink. Not so good if you want a quiet place to sleep.
Another thing..like almost all hostels in Western Europe, they charge to rent a towel. I always bring a quick-dry towel to avoid the charge.