Welcome to our ALL SPAIN Message Board, Caitlin!
European youth hostels are almost always the cheapest form of lodging. If everyone in your group do not mind a large, dorm-style of lodging with shared bathrooms, people opening/closing the room door at all hours, snoring, security issues, and no privacy during the day then youth hostels are for you.
Depending on how many people you have in your group, you may be able to get yourselves a 4-person hostel (called "hostal" in Spanish). Hostels are budget hotels in Spain. Budget hotels in different parts of Europe are called other things like in Italy where the budget hotels are called pensions or "pensiones" in Italian. In Spain, don't confuse hostels with youth hostels which are the dorm-style lodgings and are called "albergues juveniles" in Spanish.
If you decide on youth-hostels remember that you'll likely be putting your bags in lockers so it's a bit less convenient than having your own private room. Also, not all youth hostels are open 24-hours in Europe so if you and your friends are our dancing until the late hours you may miss the LOCK-DOWN hour and be left on the street to freeze.
Enjoy your time in Europe! Saludos, MadridMan
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