Hostal Alcazar was exactly what we needed to be, and then a little more.
Pros: We had our own bathroom, breakfast was included, and we felt safe.
Cons: It was located over a pizza parlor, so it was extra warm at night (this could also be a pro, depending on who you are), and it was located pretty far from downtown.
Over all, this was a good experience, and I would recommend it to people looking for an affordable stay in Puerto Natales.