Renting an apartment is cheap in Barcelona because of the euro and low Spanish salaries.
Instead of staying in stuffy, outdated hotels or even stuffier, sweaty hostels, get a designer pad of your own, in the centre, near the beach, it's about 20-30 euro each per night and well worth it.
With this company we got a huge and very cool, new place just off the Ramblas to come and go as we pleased. Ace!
Updates
I wouldn't use www.way2stay.com - I waited for them two hours last year to get into the apartment.
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Search Been there
www.waytostay.com/Barcelona-apartments-en-52-2444.htm
the location looks great and it was 25 Euro each per night!