Jerusalem is one of the most visited pilgrimage cities on earth, and it has lodging for every budget – from simple Old City hostels a few minutes from the Holy Sepulchre to mid-range hotels in the modern New City. This guide breaks the options down district by district, with a shortlist of real, well-reviewed budget places at the end. Note that “budget” in Jerusalem usually means hostels and guesthouses rather than cheap hotels.
Inside the Old City (Christian and Muslim Quarters)
Staying within the walls puts you minutes from the Church of the Holy Sepulchre, the Via Dolorosa and the markets. Accommodation here is mostly small, historic hostels and pilgrim guesthouses along the lanes of the Christian and Muslim Quarters. The atmosphere is unmatched, but rooms are simple, the alleys are stepped and noisy, and most gates close to vehicles – so pack light and be ready to walk.
Around Jaffa Gate
Jaffa Gate is the main western entrance to the Old City and a natural base: you are seconds from the walls but also close to the New City, taxis and the light rail. The area mixes hostels with a few mid-range hotels, and it is one of the most convenient spots for first-time visitors who want the Old City on their doorstep without getting lost inside it.
Around Damascus Gate and East Jerusalem
North of the Old City, the Damascus Gate area and the streets of East Jerusalem (such as Nablus Road) offer some of the city’s more affordable guesthouses and small hotels, popular with pilgrims and backpackers. It is lively and well connected by bus, though travellers should follow current local advice about the area before booking.
The New City (City Centre and Jaffa Street)
West of the walls, the modern centre around Jaffa Street and Mahane Yehuda is served by the light rail and full of cafes, restaurants and mid-range hotels. It is calmer in the evenings than the Old City, with more standardised rooms, and the tram gets you to the Old City gates in minutes. A good choice if you want comfort and nightlife over historic atmosphere.
Recommended Budget Stays
The places below are real hostels and budget properties in and around the Old City, with their Google rating and review count at the time of writing. Ratings, availability and prices change, and standards at very cheap Old City hostels vary widely, so read recent reviews and confirm details before booking.
- New Citadel Hostel (Old City, near Jaffa Gate) – 4.4 / 5 (around 27 reviews).
- Golden Gate Hostel (Old City) – 4.2 / 5 (around 63 reviews).
- New Swedish Hostel (Old City, Christian Quarter) – 3.8 / 5 (around 46 reviews).
- Jaffa Gate Hostel (Jaffa Gate) – 3.7 / 5 (around 77 reviews).
- Hebron Khan Hostel (Old City) – 3.6 / 5 (around 378 reviews).
- Palm Hostel (near Damascus Gate) – 3.1 / 5 (around 504 reviews), a long-running backpacker option.
Budget Tips
Book well ahead for Easter, Christmas and Jewish high holidays, when the whole city fills and prices rise. The Old City has almost no parking, so if you arrive by car, a New City hotel with the light rail is often easier. Many pilgrim guesthouses are run by churches and convents and offer simple, quiet rooms at fair prices – worth contacting directly. Finally, distances in Jerusalem are short: even the New City is only a tram ride from the Holy Sepulchre.
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