In most cases, it is very easy to book a hotel. Open an aggregator from many reservation systems:
http://www.hotelscombined.com/?a_aid=132060
Read hotel descriptions, look at the pictures, check the location at the map and rating. And read the reviews! This is the most important thing. Any hotel has some negative in reviews. But if it's too much of negative, you'd better to choose some other hotel.
Pay attention to the room's area, when reading it's description. If the area is less than 10 sq.m, then this is a little box, which fits a bed only. Comfortable room size starts from about 20 sq.m.
Remember that not every room has its own bathroom. "Shared bathroom" means that the bathroom is outside the room, and everybody will use it.
About hostels. "Dorm" means that the room has from 4 to 20 beds. If you are low on money, and hostel is the only choice, I advise to choose a room with a minimum number of beds. Such a rooms often has many empty beds, because everybody prefer cheap rooms with lots of beds.
Unlike air travel it is difficult to save on the hotel. Yes, some hotels sometimes have sales. Yes, weekdays prices are usually slightly cheaper than on the weekends. But overall, the hotel usually stands on its price. And if it's too expensive for you, you just have to look for another cheaper hotel. However, I've got a couple of secrets.
Secret #1. There are several web-sites with discounted last minute deals for luxury hotels. But you will know the name of the hotel only after you'll pay for it. First, you choose check-in date, hotel category (for example "5 Stars") and the district where hotel is located. You'll see the price, but not the name of the hotel. Second, you pay, and next you see the hotel name and exact address. Such a system is ideal if you are looking for the best value for money. Also note that you shouldn't wait for great discounts if you are traveling to a popular destination in the high season. The most popular web site of such a kind is:
Secret #2. If you get to a luxury destination with extremely expensive hotels, it is possible to apply the method, which I successfully tested in Bora Bora.
Bora Bora is the top beach destination in the World. It is an atoll with the Big Island in the center, and small islands (so called Motu) at the perimeter of atoll. The best beaches are located at these motu's. A trip to Bora Bora makes sense only for the hotels located at motu's. Hotels are very expensive with overwater bungalows and perfect beaches. Same time Big Island has several cheap guesthouses. So my method was as follows:
The first night I spent in a cheap room on the Main Island. The second night I spent in an expensive hotel in the Motu. The third night - again on the Main Island in a cheap guesthouse. The fourth night - in an expensive hotel on Motu (this time it was another hotel). And so on... In this way I came to the luxury hotel early in the morning, long before the check-in time. And left the hotel next day in the evening, much after the check-out time. No one asked me to leave the hotel territory. Firstly, when you are in a small island there's no place to leave it. Secondly, expensive hotels take care of clients, even in unusual situations. As a result all my expenses were (very roughly):
$100 + $1000 + $100 + $1000 + $100 + $1000 + $100
So I spent $3500 per week for the hotels. If I lived in expensive hotels only, I would spent twice more money, and my vacation would have been much more boring!
P.S.:
The most extreme way to save money is to live in a tent. Some people manage to spend a night even without a tent. I've traveled with a tent two times, and it was an interesting experience. But still if you have little money, you'd better to stay at the hostel. If you don't have enough money even for a hostel, it is better to think about job instead of travel :)