Will I have a hard time finding an inexpensive room in the hill town of Arcos at the beginning of May...Tim I usually arrive in morning and look for lodging then.
No, rooms are cheap. Get a list of hostals by searching budget lodging on tripadvisor.com. I like to bring a list of a handful of likely choices at each stop. I buy a cheap local cell phone to call ahead for a room for the night. Last April, I only missed my first lodging choice once (in Granada) - but still found a perfectly nice, and cheap, place to stay.