I stayed at Los Portales (No. 1) for three nights and it was okay for my purposes. Don't expect a lot of attention from the staff - they are mainly occupied in the restaurant on the ground floor and I didn't see much of them. I mostly took my room keys with me because the reception was hardly ever occupied, so I felt safer with them being in my pocket.

My room was okay, the bed was comfortable and the hot shower worked well. The walls are indeed very thing, so if you are not a heavy sleeper this might trouble you. In addition, the windows leave several tiny openings, so you can hear a lot of the street noise (cars beeping when going backwards, trucks and the annoying melody of the garbage truck) and the room gets pretty cold at night. I had my sleeping bag with me, so I could still sleep well.

Breakfast is not really worth the effort of getting up before 7 (if you don't have too) - if you are lucky you get some fresh bread rolls, jam and butter. On my first day I asked for cheese (like on the other tables) but never got it, so I didn't even bother to go to breakfast a second time. The market at the main square offers traditional Peruvian breakfast at 2.50 soles (jugo de quinua and a breadroll with cheese or avocado) which I would recommend to everyone instead.

Portales has 2 Hostels in Chivay. We stayed with 8 people in Number 1. Chivay nights can be cold. Beds come with 3 blankets. Make sure to ask for a movable mini heater if needed. The staff is slow, but friendly. Breakfast is served very early, as people are leaving for the Cruz del Condor. We paid 50 Soles for a double room. Not sure if you can find a better price/quality deal in Chivay.

As from some earlier reviews mentionned, the hostal is 5 minutes walking time from the village center away. Just take the mainroad (which is 100 Meters away) to walk and you will be fine. The hotel overs for lunch a Buffet (25 soles), however you get better deals in the village down the road.

We were forced to stay here through a 2-day, 1-night trip to Colca Canyon. This isn't a place we'd have selected if we'd had a choice.

The hotel is gloomy, poorly lit, and with poor service.

Minuses:
-The hotel is down a dark, muddy road that is a bit sketchy at night. Even in Chivay.
-The service is awful. There was no manager during the day that we saw; at night, it was a (seemingly) 12-year-old boy. He blasted the TV at night, and we had to ask hiim to turn it down so we could sleep.
-We were supposed to have an included breakfast at 6am with our tour price. At 6am, it was still dark in the dining room- we had to turn on the lights- with no food anywhere. The kid overslept, and when the owner(?) finally woke him up, we had maybe 15 minutes to gulp down stale rolls (but not the butter, which he gave to us AFTER we finished the stale rolls)
-The walls are PAPER THIN.
-Chivay is a cold mountainous town. This hotel is FREEZING. But there was no one around to lend us extra blankets, so we froze all night.
-Poorly lit, generally run-down

Pluses:
-Hot water
-Walkable to Plaza de Armas
-Generally clean

I would not recommend this hotel.