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What's a good place to stay in Italian Switzerland?

My husband and I are grad students in Switzerland for the summer. We want to go on a weekend trip to the Lugano region, and we don't have tons of money. The recommended hostel, the Montarina, is booked solid all summer - unsurprising, since both Rick Steves' book and Let's Go (the popular college travel book) recommend it.

Does anyone know an affordable, but nice, place to stay in the Lugano region? The other hotels recommended by Rick are a little bit too pricey - 120 or 130 SF is our upper limit.

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Last yr we stayed at Hotel Pestalozzi dble share bathroom at 112SF. Great value, central , very clean, quiet and great buffet breakfast. Book quickly as they fill up.