You could try getting a train to Italy - you could maybe enquire with aer lingus on the cost of changing the flights one way so maybe spend a couple of nights in austria and then move on to somewhere cheaper, we got an overnight train from venice to vienna once (not that venice would be cheap at that time of year but you could look to other places you could reach by train), we had a private cabin / room - it was pricey enough but effectively the train tickets that way also covered one night's accommodation. Are you sure you are comparing like with like - a nice hotel in vienna might be more luxurious than a nice hotel in Spain.
Also have you checked the sensitivity of prices to different days of the week. Central hotels may well be more expensive during the week but more affordable at the weekends, unless there is something specific on (see below).
I think Expedia have some deals at the moment eg book 3 nights save a third on your stay.
Vienna Events and Festivals in June - Vienna, Austria, AT
Jazz Fest Wien - mid-June to mid-July, a leading Austrian jazz festival with some big names in the world of jazz and an outdoor concert within Vienna's centrally located Rathausplatz, which is always completely free of charge and quite a crowd pleaser
Nova Rock at Pannonia Fields - mid-June, an established rock festival in nearby Nickelsdorf, first staged in 2005 and known for its famous groups, which have been headlined in the past by Guns 'N' Roses
Donauinselfest (Donau Island Festival) - late June, with plenty of music and dancing to go around, based on the Donauinsel islands, on the River Danube