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The Mid-City Hotel mentioned above is typical of several hotels in the $130-140 range. A reliable choice in a very central location.
If you want to go cheaper to a more basic backpacker style room, with a private bathroom, have a look at the Brunswick Hotel and Hobart Hostel, which have rooms in the $80-100 range.
Do you have the LP Tasmania guide?, there are quite a few listings in the Hobart section.

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If hostels don't bother you, the Pickled Frog is great and very central. It seemed popular with university students who were doing courses in Hobart. They also run a free shuttle to the top of Mt. Wellington.

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