Most travelers are deeply habituated to having a private room. But if you're open to alternatives... imagine a vacation where you lose some privacy, but spend little or nothing on lodgings and meet new people. Imagine, for example, staying with a local host family in another country. On a paying basis, this is called a "homestay". Alternatively, you might join a "hospitality club" and stay with a family as a guest.
Hospitality Clubs
The idea of staying with a family you've never met doesn't appeal to everyone. After all, you're taking a chance: hoping that your hosts will be interesting, friendly folk... But don't forget: they're taking the same chance, on you!
In fact, hospitality clubs tend to attract an interesting set of people. Typically, club listings give enticing details about host families, such as hobbies, occupations, family make-up, etc. -- good match-making is in everyone's interest. Travelers praise the opportunity to make friends and live locally.
Homestays
Homestays are another way to stay with a local family-- but on a paying basis. Usually rates are modest, but saving money is not the only benefit; travelers enjoy making friends and getting an inside look at another culture.
Hostels
If you're traveling in Europe pay attention to the word "hostels", as they've have changed much in recent years. Former "youth hostels" welcome people of all ages, including families staying in "family rooms." Spartan but clean, these rooms typically have bunk beds, and sometimes a private bathroom; otherwise, a toilet and shower will be a few steps away (--extremely clean, in our experience.) Some hostels are housed in architectural treasures: castles in Scotland, a centuries-old villa in Verona, former monasteries... low on the budget, high in character.
- See links for Hospitality Clubs and Hostels

