There are more places to spend the night than just hostels. You could try camping (ie. in a tent), staying in a hotel, boarding with a family in a private house, sleeping on the beach, etc. Each of these are discussed below.
(*relevancy of information provided here will depend on what part of the world you are traveling in)
The main differences between hostels and hotels are that hostels usually have dormitory-style sleeping arrangements and are usually cheaper, while hotels offer private rooms, often provide a bigger bed and are usually cleaner than hostels. Obviously, the more you pay for a hotel room, the better it will be (for the most part), but then this is true for hostels as well.
That said, there are exceptions in some cities (or areas of a city) where a hotel is a better value than a hostel. It may be cleaner and safer than a hostel, and may be located in a better part of the city. As well, paying for a hotel room may provide you with an opportunity to sleep more people in the room (ie. on the floor), thus lowering your price-per-person ratio.
While traveling in Egypt, we paid $10 US per night for a hotel room in the heart of Cairo. We had our own room with a locking door, a big bed and nice balcony looking out over the city (although through the smog). We had three people in the two-bed room, dropping the price to about $3 US per person. The hostel option in Cairo consisted of terribly run down places that were dirty and not much cheaper than what we paid for a hotel.
Traveling in Vietnam was very similar; hostels were often cramped and poorly maintained, while hotels offered air-conditioning, television, a small refrigerator and hot showers for around $9 US. So consider hotels if you get the chance and feel it is affordable. As in most travel experiences, check around before settling on a place to stay for the night.
Camping is a very affordable way to spend your nights. Campgrounds range from $10 US right down to free if you pitch your tent in an open field or on the beach. Watch out for private property though or you may find yourself being tossed out of the area at a way-too-inconvenient time.
You have two basic options when you camp with a backpack. You can either tent or you can go without a tent. The main problem with a tent is that you have to lug it (and your sleeping supplies) around with you. However, it gives you some protection from bugs, it keeps you dry (or keeps the blowing sand off of you), and it also gives you some privacy. If you are in warmer climates though, a sheet and a bug screen to drape over you may suffice.
For warmer climates, you can sleep without a tent. Just go bare and lie on the ground or use a hammock slung between two trees or posts to keep you off of the ground. If you are interested in using a hammock as your main accommodations, check out the Jungle Hammock from Clark Outdoor Products.
Boarding is a great way to spend your nights. Friendly people in many cities around the world offer their spare rooms to foreign travelers for low prices. They often include home-cooked meals, comfortable beds and interesting conversation and offer a great way to get to know the genuine local culture. You might have your own small house to stay in or just a spare room.
Some guide books may list boarding facilities but often you will just meet these people as you are walking by. We boarded in Kyoto, Japan, and had many opportunities to talk Japanese, watch Japanese television, eat homemade food and even try on some Japanese clothing. Beware though of scam artists or people mis-representing themselves. It is often safer to board with one or two traveling companions.
Bed and Breakfasts (B&Bs)
Contrary to what many travelers might think, many B&B's also offer affordable accommodations. They can often be found in some of the most amazing locations. More comfortable than a hostel, and often with more amenities, a true bed & breakfast is a home situated in a residential area with the emphasis being on hospitality in a family setting. The homes may vary in design from heritage homes to modern bungalows. Guests are greeted at the door, provided overnight accommodations which often include breakfast.
Rest, relaxation and interesting breakfast conversation is usually the norm with fellow travelers and hosts who can supply information on local attractions, amenities and are genuinely interested in providing an enjoyable experience for their guests. Guests want to stay in B&B's for their uniqueness, quiet relaxation and the desire to meet fellow travelers and share experiences. It is not unusual for friendships to develop among guests from all parts of the world.
Other Sleeping Options