It is an oft repeated truism among budget and long range travellers that it is better to stay in an expensive hostel than a cheap hotel. This is particularly the case in places like Egypt where cheap hotels can be very cheap indeed. However, to confuse this little maxim, certain cheap hotels have slid over into the hostel market by offering dorm rooms, lockup and luggage storage, travel advise and tour bookings etc, all of which are the backbone of international budget travel industry.
Egypt, however, has a collosal hotel infrastructure, and the good news in that no matter how cheap or grubby your hotel is, it will seem like utter luxury if you have just sweated north from Addis Ababa or Nairobi.
Happily, however, quite as Egypt is well served by a diverse and mature hotel industry, so is it well supplied with hostels and backpackers lodges. Prices vary, of course, but expect to pay between US$5 and US$7 for a dorm room, and between US$10 and US15 for a private single. Some include breakfast in the price, and some do not, besides which breakfast is often the much misused continental breakfast which more often than not is toast and jam with a cup of coffee.
On the whole client ratings for hostels in Egypt tend to be a lot better than similar travel advisory assessments of standards and general levels of satisfaction in hotels. This cannot be entirely because hotel patrons expect more, and might possibly be because standards of hostel accommodation are high, as indeed they are.
Prices outside Cairo and Alexandria are usually much lower, with standards also slightly lower, but not appreciably so. Egypt has a handful of destinations on the established tourist routes where quite a few hostels with a European orientation help take the guesswork out of travel. Some of these aspire to an obvious market, with names like the Bob Marley House Hostel in Luxor, and indeed, if you want to take a chance on a lengthy spell in another style of budget Egyptian accommodation, you might even find a local variant of the famous Bob Marley carrot on sale around the back.