As a new hostel it was very hard to find because there was no sign/number at the front (they said it was being made). Mourad was really nice/friendly and helpful and tried to make the stay the best it could be. Rooms were clean, and free breakfast was OK. The hot water worked well.
The terrace was nice and is almost exactly like the pictures.
The Merzouga tour I booked through the hostel was average. You can definitely find cheaper if you search around the market, but might not be worth the effort of organising pickup/drop-off. On the same tour, some people paid a lot more, and others a little less, so it wasn't too bad.