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An Abundance of Options
Traveling in Germany is a popular pastime. As such, there are great accommodation facilities that are widespread throughout the country. There's a very organized hosteling association, but there are also many privately run facilities that are not affiliated with association. You can find any range of accommodation types, and in the larger cities you can find most major international chains. Particularly in cities, the rooms might be smaller than their American counterparts, but most hotels have many amenities that make up for the smaller size.
It is possible to do a homestay in Germany, or find a room in an apartment or house. This can be a great way to experience the local atmosphere and have more than the typical holiday experience. It also is beneficial to have access to a kitchen which will help you avoid the cost of eating out. If you choose the homestay option you may also have access to a great tour guide who is excited to show you their hometown.
Researching Your Options
Accommodation in Germany can be quite expensive. If you're concerned about your budget, it is a great country to try couchsurfing. There's an active network of "couchsurfers" here and you'll learn a lot about the country this way. Also consider renting an apartment or house. This will give you access to a kitchen and will give you a great base to explore the surrounding environment. If you're traveling long term it can be beneficial to have a base for a while that you can turn into your home.
Choose your destinations wisely as well. Larger cities tend to be more expensive than the smaller towns, so be sure to incorporate some rural areas or small towns into your trip. This is a great way to diversify your trip and enjoy the countryside as well.
Something For Everyone
Germany has a widespread network of hostels, with over 600 hostels distributed throughout the country. The International Youth Hostels (Jugendherbergen) are managed by the Deutsches Jugendherbergswerk Association. This association is affiliated with the Hostelling International network.
There are also countless options throughout the country for budget, mid-range, and luxury hotels. You can find international chains, but also German chains that are throughout the major cities in the country.
For a more local experience, consider staying at a Bed and Breakfast, referred to as "Pensionen" or "Fremdenzimmer." They are less formal and comfortable than hotels, but they are a great way to interact with some local tourists. It is also possible to find camping options throughout Germany. They vary in quality, and there is no real standard expectation, so be flexible and check out the facility before you commit.
Following the Cold War there was a boom in the construction of hotels. There still remains a slight oversupply of hotel options in the city so it is possible to find a place to stay for a cheaper price than you might expect, particularly if you're in town during the off season. The most popular, and most convenient place to stay is in the neighborhood of Berlin-Mitte. This is where most of the sights and attractions are located, and where you are likely to spend most of your time. Many of the city's hotels are also found around Zoo station. At Alexanderplatz and Anhalter Bahnhof you'll find a good number of two and three star hotel options. Before making a reservation confirm where your hotel is in relation to public transportation. Public transportation is key to exploring Berlin in an efficient and affordable way.
Camping is also a possibility in Berlin during the summer months. You'll find a campground on the grounds of an abandoned swimming pool in the Berlin/City West area.
Munich has every type of hotel you could want. Almost every major international chain is available and there are plenty of locally run options in the form of hostels, guesthouses, and bed and breakfasts. Around Hauptbahnhof, or the train station, you'll find the highest concentration of youth hostels. These hostels are comparable to those options found elsewhere in Europe. Many have both dorms and private rooms you can choose from. There is often a bar or pub attached to the hostel, and some places have a small restaurant or include breakfast in the price of the room. Hostels are usually very social and there are common areas where you can meet fellow guests or relax and watch a movie on the television. Many of the more upscale hotel options are situated around Le Meridien and Sofitel. Schillerstrabe is just a few hundred meters away and it has many smaller, boutique style hotels to choose from. This area can become a little seedy at night though. Other popular areas for youth hostels and small hotels include Schwabing and the Ostbahnhof area.
Prices for hotels can vary dramatically depending on the season. The summer months are the most expensive time to visit Munich. The two weeks in October during Oktoberfest are also more expensive. Winter months are easily the most affordable time to visit the city, but the weather is also dreary and cold.
Location is important in choosing a hostel in Munich. You want to be close to public transportation so that the rest of the city is accessible. It's also good to be in an area near restaurants and entertainment. Much of the city is pedestrian friendly so it's enjoyable to walk around and explore the neighborhood you have selected.