The huge provider like Booking.com, hostelworld.com and Tripadvisor.com because of sanction cannot have Accommodation Booking in Iran. But in this case to find good and cheap Hotel or Hostel you can use Iranian (local) Booking system. Something like Iran Traveling Center, I know this site since many years ago and I thought they start work from 2001.
If you are interested in meeting people I would definitely suggest Couchsurfing. As an Iranian I can assure you they’d love to provide host, specially to foreigners.
You can find many Couch surfers in big cities.
Here is just a sample search for Tehran.
Unfortunately, in Iran there are not (yet) many good hostels as you can find in Europe. And you shouldn’t expect to see an international environment in the hostels there either. Maybe in close future but not yet.
Also TripAdvisor has a great database of comments for hotels and restaurants. An an example I give you a list of restaurants and hotels in Tehran sorted by their rankings (A restaurant is always a good place to meet/communicate with Iranians):
Tehran hotels:
http://www.tripadvisor.com/Hotels-g293999-Tehran_Tehran_Province-Hotels.html
Tehran restaurants:
http://www.tripadvisor.com/Restaurants-g293999-Tehran_Tehran_Province.html
EDIT
Seems like there has been some progress since my original answer and now there are more qualified hostels and reservation systems in Iran. I’ll gradually list them here.
Online Hotel Booking
In their FAQ page they claim:
The first and only site that allows you to book and pay for Iranian
hotels from outside of Iran
– Seven Hostels
Location: Tehran
Seems fairly good (at least in the photos!).
Website: http://www.sevenhostels.com/
– Tehran Hostel
Location: Tehran – GPS coordinates: 35.715353,51.470853
(Close to the Sabalan metro station and BRT bus line)(Recommended by many travellers (TripAdvisor Profile)!)
Website: http://www.hosteltehran.com
– HI Tehran Hostel
Location: #2, Tabatabaei Alley, Bahar Shomali Street, Tehran – location on Google map
(Close to the Haft-e-tir metro station )(Visit Trip advisor page (TripAdvisor Profile)!)
Website: https://www.hitehranhostel.com/
Buy a Lonely Planet guide for Iran. It lists plenty of affordable places in all the major urban centres. There aren’t many European-style hostels in Iran, but many of the budget hotels effectively operate like hostels, as these are the places independent budget-minded travellers in Iran flock to.
At most of these, you’ll get away with speaking (some) English with the staff, though this won’t always be guaranteed.
Credit:stackoverflow.com‘