Sorry, no, there are not any nearby cities or towns which may provide equal or superior accomodations (i.e. Ft. Stockton or Pecos).. Carlsbad has always had a problem with hotels and especially restaurants. Since the caverns are a huge tourist draw (and rightfully so), it seems some hotel owners just feel they do not have to keep their facilities or staff in top notch form.
It is about 40 miles roundtrip from Carlsbad to the caverns and back. There are a handful of hotels in White's City, the gateway into Carlsbad Caverns, but while they were satisfactory forty years ago, all are well-worn by now so avoid them.
I have not checked the hotel reviews on the link from the Carlsbad
Forum page, but in recent years some seem to have improved a bit. My two experiences in the past four years was at the Holiday-Inn Express, and I thought it was OK...no complaints from me at least. Wherever you stay, ask to check the room first before paying for any obvious problems.