We spent an amazing week at the Cozumel Palace with our two children (9 months and 3 years) and my parents. It was our first all-inclusive and I was very worried about how family-friendly it would be (especially after reading some of the reviews here). However, we found the hotel and especially the service to be well-catered to our children.
The room:
We were lucky enough to be upgraded to the two-story suites on the first floor by the kiddie pool which gave us more space. However, even without the extra floor I think the room would have worked out well. The porch/balcony is very large and secure, so the kids spent alot of time playing on the porch--coloring or playing with toys. The porch was also nice for me while the kids were taking naps. I could be close to them but outside the room so they could sleep. We used the jacuzzi tub as a playpen for our 9 month old while we were getting ready, and he loved it. The tub is not ceramic (fiberglass?) and the walls are barely curved, so he was able to crawl and stand in the tub without slipping around. Also, both the baby and my three year old loved to take family baths in the giant tub. We found this to be a good activity in the afternoon, when the afternoon sun was very hot and there was little shade on the property.
The food:
There are plenty of reviews on the quality of the food. They are true: the food is very good, but not five star gourmet. If you are used to chain restaurants, the food will seem outstanding. We are moderate food snobs, and were pleased with the quality here. If your child is, like ours, a picky eater you may have some trouble. The breakfast buffet was excellent for kids, lots of choices, but the dinner and lunch options were not so varied. The child's menu is limited, but they do their best to accommodate you. We ordered toast and fruit even if it wasn't on the menu and they always complied. We started making PB&J sandwiches from the breakfast buffet and grabbing a box of cereal and some yogurt to give our daughter some extra options later in the day. Again, our daughter is picky so this isn't the resort's fault, these are just suggestions if you children are similar.
The drinks:
We found the drinks to be very tasty and not watered down. If they were any stronger you'd have a bunch of drunk people wandering around, which would simply spoil your vacation. The bartenders were outstanding and the beach service was prompt and friendly. I even had waiters bringing drinks to my porch while I was out there during the children's naps. The bar will make nonalcoholic smoothies for the children, which was nice.
The grounds:
The kiddie pool and play area were small, but clean. There aren't that many children at the resort so the size of the pool and play area was fine. Because of the position of the building, the kid's area is in shade until around noon, which is very nice if you are worried about sun exposure or heat. The adult pool gets more sun and is only in shade until 10 or 10:30, so if you like the sunlight you will be happy. While there is no beach, there is plenty of sand for the kids to play in. (The gift shop sells bags of beach toys and inflatable toys at decent prices, so you can save the space in your suitcase and just buy things there.) It was less crowded in the beach areas. While they played music throughout the day, we were never bothered by it. Even though we could hear the night activities, they did not keep the kids up and always ended around 10:00 or so at night. We were at the end of the building though so I can see how closer to the pool would be louder.
The service:
If possible, it's even better than what you read here. They go out of their way to give you a good time. They knew our names after one day and were very kind to our children. A minor medical issue with our baby was taken care of kindly and promptly. The guests here were also kind to our kids. I never felt people were irritated with our children at meals or in the pool.
The excursions:
We took our 3 year old on the ferry over to Playa Del Carmen and played at the nice sandy beach just off the ferry boat (she loved it) and we also took a $20 taxi to Xpu Ha Palace to see the animals and play in their deserted pool area. We also looked at the shells and hermit crabs at the Xpu Ha beach which was fun. Another succesful excursion was a drive to the other side of Cozumel to Chen Rio beach. Although that side of the island is windy and rocky, Chen Rio has some natural rock formations that provide a very shallow and calm swimming area. Our 3 year old loved it. We went to Chankanaab, but for young children its not as great as Chen Rio or Playa Del Carmen's beach and the snorkeling was not that good so I'd skip that excursion if you are only going for the snorkeling or for your kids.
Finally, the snorkeling was a big disappointment. Off the hotel there are fish but no reefs. Chankanaab is kind of the same and even the glass bottom boat tour does not provide that much to see. You will of course see fish but the reef was so damaged by the hurricane. If it's your first time snorkeling you will still like it, but if you have been to other islands you will be disappointed with Cozumel.
Overall, our stay in Cozumel and at the Cozumel Palace was wonderful. I would highly recommend this very safe island and this incredible resort to anyone with small kids.