Hotels
In general hotels of any kind are uniformly expensive. Luxury hotels, on the other hand, turn pampering into an artform, but room charges tend to start at ¥20,000 per person (not per room).
Capsule hotels
Capsule hotels are the ultimate in space-efficient sleeping: for a nominal fee (often under ¥2000), the guest rents himself a capsule, sized about 2x1x1 meters and stacked in two rows inside a hall containing tens if not hundreds of capsules. Capsule hotels are invariably segregated by sex and only a few cater to women.
On entry to a capsule hotel, take off your shoes, place them in a locker and put on a pair of slippers. You will often have to surrender your locker key at check-in to insure that you do not slip out without paying! On checking in you will be given a second locker for placing your belongings, as there is no space for them in the capsule and little security as most capsules have simply a curtain, not a door. Beware though if there is a curtain, since probing hands may enter it.
Many if not most capsule hotels are attached to a spa of varying degrees of luxury and/or dubiosity, often so that entry to the spa costs (say) ¥2000 but the capsule is only an additional ¥1000. Other, cheaper capsule hotels will require feeding in 100-yen coins even to get the shower to work. This being Japan, there are always vending machines on hand to dispense toothpaste, underwear and such sundries.
Once you retire into your capsule, you will usually find a simple control panel for operating the lights, the alarm clock and the inevitable built-in TV. Sweet dreams! But don't oversleep or you may be hit with another day's charge.
In Tokyo's Shinjuku and Shibuya districts the capsule hotels run at least ¥3500, but have excellent free massage chairs, saunas, public baths, disposable razors and shampoo, magazines, and coffee in the morning. Despite all that, keep in mind that your capsule "door" is just a curtain that keeps light out. You will likely hear a steady stream of drunk and sleepy business men crawling into their capsules above and across from you before falling into a mild snore.
Love hotel is a bit of a euphemism, the more accurate term would be sex hotel. They can be found in and near red light districts, but most are not in those areas. Many of them are often clustered around highway interchanges or main train stations out of the city and back to the suburbs. The entrance is usually quite discreet, and the exit is separated from the entrance (to avoid running into someone one might know). Basically you can rent a room by the night (listed as "Stay" or shukuhaku on the rate card), a couple of hours ("Rest" or kyūkei), or off hours ("No Time Service") which are usually weekday afternoons.
They are generally clean, safe, and very private. Some have fantastic themes like castles, Disney, sports, whatever. As a traveler, not a tryster, you (usually) cannot check in, drop your bags, and go out exploring. Once you leave, that is it, so they are not as convenient as proper hotels. "Stay" rates also tend to start only after 10 PM, and overstaying may incur hefty additional "Rest" charges. Many rooms have simple food and drinks in a refrigerator, and often have somewhat high charges. Before entering a love hotel, it would be wise to take some food and drinks with you. The rooms often feature amenities such as jacuzzis, wild theme decoration, costumes, karaoke machines, vibrating beds, sex-toy vending machines, and in some cases, videoconsoles. Most often, all toiletries (including condoms) are included. Sometimes the rooms have a book that acts as a log, where people record their tales and adventures for posterity. Popular love hotels may be entirely booked up in the cities on weekends.
Why are they everywhere? Consider the housing shortage that plagued post-war Japan for years, and the way people still live in extended families. If you are 28 years old and still live at home, do you really want to bring your mate back to your folks' house? Or, if you are a married couple in a 40 square meter apartment with two grade school children, do you really want to get down to it at home? Thus, the love hotel. They can be seedy, but mainly they are just practical and fulfill a social need.
One word of caution: There has been an increase in hidden cameras being planted in public and private spaces, including love hotels, either by other guests or even occasionally the hotel management. Videos of these supposed tosatsu (hidden camera) are popular in adult video stores, although many such videos are actually staged.
Business hotels
They are usually around ¥10,000 per night and have a convenient location (often near major train stations) as their sole saving grace, but rooms are usually unbelievably cramped and facilities minimal. Local, "unadvertised" business hotels, further from major stations, can be significantly cheaper (from ¥6000/double room/night) and can be found in the phonebook (which also tells prices!), but you will need a Japanese-speaking assistant to help or — better yet — book online in advance. For two or more, the price can often compete with youth hostels if you share a twin or double room.
Inns
Ryokan are traditional Japanese inns, and a visit to one is the highlight of many a trip to Japan. Since some knowledge of Japanese mores and etiquette is required to visit one, many will hesitate to take non-Japanese guests (especially ones who do not speak Japanese), but some cater specially to this group. A night at a ryokan for one with two meals starts at about ¥8000 and goes up into the stratosphere.
Ryokan usually operate on a fairly strict schedule and you will be expected to arrive by 5 PM. On entry take off your shoes and put on the slippers you will wear inside the house. After checking in you will be led to your room, which is invariably simply but elegantly decorated and covered in tatami matting. Be sure to take off your slippers before stepping on tatami.
Before dinner you will be encouraged to take a bath — see Bathe for the full scoop. You will probably wish to change into your yukata bathrobe before bathing and it's a simple enough garment, just place the left lapel atop the right when closing it. Once you have bathed dinner will be served in your room. In most ryokan dinner is very elaborately prepared and presented from carefully chosen seasonal ingredients; by all means ask if you are not sure how to eat a given item.
After you have finished you are free to head out into town; in hot spring towns it is perfectly normal to head out dressed only in yukata and geta clogs, although doing so as a foreigner may attract even more attention than usual. (Hint: wear underwear underneath.) Many ryokan have curfews, so make sure you don't end up locked outside.
When you return you will find that futon bedding has been rolled out for you on the tatami. While slightly harder than a Western bed, most people find sleeping on a futon very pleasant. Note that a real Japanese futon is simply a mattress, not the low, flat bed often sold under the name in the West.
Breakfast in the morning is usually served communally in a dining hall at a fixed time.
Note that some establishments with the word "ryokan" in their name are not the luxurious variety at all, but just minshuku (see below) in disguise. The price will tell you which type of lodging it is.
Minshuku
Minshuku are the budget version of ryokan: the overall experience is much the same but the food is simpler, dining is communal, bathrooms are shared and guests are expected to lay out their own futon (although an exception is often made for foreigners). Consequently minshuku are also cheaper and rates hover around ¥5000 with two meals ( ippaku-nishoku). Cheaper yet is a stay with no meals (sudomari), which can go as low as ¥3000. Minshuku are more often found in the countryside than in cities.
Kokuminshukusha
Kokuminshukusha, a mouthful that translates quite literally into "People's Lodges", are government-run guest houses. They primarily provide subsidized holidays for government employees in remote scenic spots, but are usually happy to accept paying guests. Both facilities and prices are usually more comparable to ryokan than minshuku standards; however, they are almost invariably large in size and can be rather impersonal.
Shukubō
Shukubō are lodgings for pilgrims, usually (but not always) located within a Buddhist temple or Shinto shrine. Again, the experience is broadly similar to a ryokan, but the food will be vegetarian and you may be offered a chance to participate in the temple's activities. Shukubo can be reluctant to accept foreign guests, but one place where this won't be a problem is the major Buddhist center of Mt. Koya near Osaka.
Youth hostels
Youth hostels (yūsu hosteru, often just called yūsu or abbreviated "YH") can be comparatively expensive in Japan, especially if you opt for dinner and breakfast and are not a HI member, in which case the price for a single night may be over ¥5000. As elsewhere, some are concrete cellblocks run like reform schools, while others are wonderful cottages in scenic spots. There are even a number of temples that run hostels as a sideline.
Camping is the cheapest way to get a night's sleep in Japan. There is an extensive network of camping grounds throughout the country, although naturally most are away from the big cities and information in English is sparse. Transportation to them can also be problematic, as few buses may go there. Most charge only nominal fees (¥200-500).
Camping wild is illegal in most of Japan, although you can always try to ask for permission — or simply pitch your tent late and leave early. Many larger city parks may in fact have large numbers of blue tarp tents with homeless in them.

Nojuku
For the real budget traveller wanting to get by on the cheap in Japan is the option of nojuku. This is Japanese for "sleeping outside", and although it may seem quite strange to westerners, a lot of young Japanese do this when they travel. Thanks to a low crime rate and relatively stable climate, nojuku is a genuinely viable option if you're travelling in a group or feel confident doing it on your own. Common nojuku places include train stations, michi no eki (road service stations), or basically anywhere that has some kind of shelter and public toilets nearby.
Those worrying about shower facilities will be delighted to know that Japan is blessed with cheap public facilities pretty much everywhere - notably onsen, or hot springs. Even if you can't find an onsen, sento (public baths), or sauna are also an option.
Bear in mind nojuku is only really viable in the summer months, although in the northern island of Hokkaido even in summer the temperature may dip during the night. On the other hand, there's much more scope for nojuku on Okinawa (although public facilities on the smaller islands are lacking).
Nojuku is not really recommended for first-time travellers to Japan, but for those with some experience, it can be a great way to get into the 'onsen' culture, meet other fellow nojuku travellers, and most of all travel very cheaply when coupled with hitchhiking.
Gaijin houses
If you're staying for a longer period, say a month and longer, you might be able to drastically reduce your living costs by staying in a "gaijin house". These establishments cater specifically towards foreigners and offer at least minimally furnished and usually shared apartments at reasonable prices, and without the hefty deposits and commissions of apartments (often up to 6-8 months rent worth) paid before moving in. Nearly all are only in the Tokyo area, however. It will almost certainly be cheaper than staying in a hotel for a month. Gaijin houses can be anything from ugly cramped apartment complexes with new tenants every week, to nice family run businesses in private houses, so try to get a look at the place before you decide to move in. One of the biggest letting agencies for gaijin houses in Tokyo is Sakura House.
Apartments
Traditionally, renting an apartment in Japan is a ridiculously complex and expensive process, involving getting a Japanese resident to act as your guarantor (literally — trash up the place and run away, and they'll get stuck with the bill!) and paying half a year's rent or more in advance. This is thus essentially impossible for anyone who isn't familiar with the culture and there to live and work for a few years at least.
In recent years, though, weekly mansions (short-term apartments) have become popular for residents (typically businessmen on long-term assignment or young singles) and are accessible even to visitors. Most are 1 or 2 person rooms, though larger ones for 3 or 4 are sometimes available. Apartments fees are around 5000 yen for a single, around 6000-7000 yen for a two person room per day. Most of these apartment rental agencies will offer all apartments with shower, toilet and bath. They usually have air-conditioning, microwave and cooking ameneties. A great company that also accepts and replies to English E-Mail is Weekly Mansion Tokyo. Please allow some days for a reply, as only one employee is fluent in English. WMT has more than 50 apartment buildings in Tokyo and Yokohama. Recently they opened buildings in Nagoya, Osaka and most recently in Sapporo. Sometimes a deposit is required for some of the apartments. Without exception the apartments are kept clean and often have much more space and flexibiliy than a hotel and are priced in the Youth hostel range.

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