Traveling through Switzerland for two weeks, I decided to spend 2 nights in Montreux, particularly since it was cheaper than staying in Lausanne. This was by far the cheapest hotel during my trip, and it showed. Can't expect much, particularly with a single room, but it was unexpectedly tiny. I had to leap over my suitcase, or climb over the bed, to get around the room.
Let me point out that the hotel staff was nice, rooms and hotel were well-maintained and clean, and the location is pretty good. It's a slight, but not very far walk from the train station. Freddie Mercury and the Montreux Casino are short walks from the hotel, and there's a bus nearby that will take you to the Château de Chillon.
I have given the hotel a 2/5 overall because I usually expect more from a 3-star hotel. Too many inconveniences drag my rating down. Apart from the room being very small, there was nowhere to sit comfortably in the room to work on a laptop etc. - there's a chair in the room, but it's not ergonomic. The internet connection was slow and barely reached my room at times, and if that wasn't enough, the showerhead had an odd setting that spread the water like an umbrella, and this could not be adjusted.
Cheap 3-star hotels shouldn't be as inconvenient in some areas as I experienced it, but if you're OK with that in order to save a bit money, then you'll be more than fine.