Hotel Federal is officially a 3 star hotel but I would rate it higher than this. It is situated opposite the railway station and is a 5 minute walk down a sloping path, although the hotel runs a free shuttle bus to the station. The staff on reception are very friendly, happy to help with information on sightseeing and restaurants and always have a supply of free chocolate.
We booked two adjoining rooms for my wife and I and our two young sons. One of the rooms had 2 twin beds and the other had three twin beds. One had a bathroom with a shower and the other had a bathroom with a bath. One had a small balcony. There was plenty of storage space, although no drawers. Each room had a TV and safe. One of the safes was not working as it had a low battery. We mentioned this to reception and it was fixed in a matter of minutes. One day when our rooms hadn't yet been cleaned we asked reception whether they could be cleaned and within a matter of minute two chambermaids arrived.
Breakfast is served in the restaurant on the ground floor. It was OK but nothing special. There is a limited choice of cereals and home made muesli. The choice of fruit is not great. There is a good selection of fresh bread, with jams and cheeses.
There is a bar and quite often we got drinks to take back to the room. There is internet access here.
The hotel is a few minutes walk into the centre of Lugano. The walk is down hill on the way into the centre and, on the way back, you can either walk up hill or take the funicular to the station and walk down to the hotel.
One nice touch when we left was that the hotel presented us with a jar of locally produced honey. It is small touches like this that make this a great place to stay. I would definitely recommend this hotel.