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Hotels in Tel Aviv & Jerusalem?

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Looking for hotel suggestions in Tel Aviv and Jerusalem for a visit starting Oct. 22 for 10 days -- a week after the holidays end. I'm bringing my DH for his first-ever trip, and while I've been more than a half-dozen times, I've always stayed with extended family and never booked a hotel. Now with a husband, we must stay in a hotel, which is a new experience for me ;-) We're in our mid- to late-40s.

Because I've only stayed in homes/apartments with family and friends, I've never given thought to areas to stay. In Jerusalem, for sure we would rather stay in Western Jerusalem/new city area. In Tel Aviv, I don't really know enough to choose an area. (I just always walked or took the bus to where I wanted to go, but with a first-timer, maybe there's a better area?) I'm wondering if staying on the beach will be a lot more expensive than somewhere else. I'm assuming that many people will leave after the holidays end and that hotels will lower prices as if it's an off-season. Am I dreaming?

We are not expecting 5-star, or even 4-star luxury. In my dreams I'd love a funky boutique hotel but if that's not possible I won't complain. Just somewhere with a private bathroom. $150 would be the top of our budget per night.

I see in another thread someone suggested the IYHA hostels. That would probably be fine for us but I wonder if it's filled with university students?

thanks for any guidance and suggestions.

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