Apartment Rentals

In some cases, it may be cheaper for groups to stay in self-service apartments rather than hostels.
These often have furnished kitchens which allow you to cook at home and save even more. 


Couch surfing

One well known cheap alternative to hostels is couch surfing.  This is free and can be a great cultural
experience.  However, it is important to note that it is intended to be a reciprocal arrangement.  You
need to offer your house to others.  So if you live in a crowded flat with a lot of housemates or have
a large family this may not be ideal.  In addition, many locations are not central so you will need to 
add in the additional cost of transport.

http://www.couchsurfing.com/


Sleeping in Airports

Another free alternative for budget travellers is to sleep in airports.  I recommend this only if
you are desperate.  Experiences vary, but uncomfortable seats and being woken up by security guards
regularly are the norm.

http://www.sleepinginairports.net/
    
Cheap Hotels
    
    At the time you book your flight, you can often book hotels at cheap rates as part of the package.
    Some hotels are close to hostel prices.  Quality will vary.

Bed & Breakfasts

    Usually a bit more expensive than a hostel.
    
http://www.bedandbreakfast.com/