On the basis of his observations in early 20th century Palestine, the evidence of archaeology and the consideration of the Bible and other texts, Gustaf Dalman described how animals would have been housed in Ancient Israel and Roman Judaea.
At times, shepherds would have stayed in the field with their flocks. Often shepherds would have used simple tents or would build huts out of branches. Sometimes the flock would be kept in stone enclosures.
Caves were also used to stable animals, sometimes even with feed troughs. The picture above shows the entrance to a cave near Tell Halif which was later used as a stable, though previously it may have served as a cellar of a house. In it I found this door jamb and feeding trough. Others might call it a manger.
Sheep and goats would have been often kept in enclosures, but cattle were usually kept inside the house. People and animals lived in close proximity. Sometimes separate stable buildings would have been used for cattle. These were close to other houses.
In addition, some animals were kept in huts: wooden shelters, such as Jacob built for his livestock in Succoth (Genesis 33:17). These probably consisted of a frame made out of poles, covered by branches.
In the Gospel of Luke we are not told what stable Jesus was born in, indeed whether he was born in a stable. But we are told that he was laid in a manger, a feeding trough. That feeding trough could have been in a cave used to house animals, in a house, or in a separate stable. In any case, it was not luxury accommodation.