We recently spent a week here November 2012 after initially booking the Riviera in Benalmadena but this was closed for refurbishment, The weather was kind to us with four days of more sun than cloud and three days of more cloud than sun but no rain. We last stayed at the Pez Espada in 2008 but this time we were in a very pleasant room in the annex with a lovely sea view, however the walls were rather thin since there was some disturbance from a group of Irish girls who came in very late on a couple of nights and wanted to drink and smoke on their balcony and in the other adjacent room someone could certainly win prizes for their snoring.
This did not spoil our stay since the reception staff were always pleasant and helpful unlike the experiences of some other reviewers who I suspect could have been more pleasant themselves The food, both quality and choice were very good. Yes there was some initial irritating queuing for dinner because the hotel was full possibly due to refurbishment of several nearby hotels.
The clientele were mainly of the older generation but that is to be expected in November and were mainly British but some German and Dutch, but when we were there a large number of Swedish were present.
The hotel is in an ideal beachfront position to walk to Torremolinos in one direction and Benalmadena in the other, and a short uphill walk to the bus stop allows access to an efficient and regular bus service to places like Mijas, Arroya, Fuengirola, Torremolinos or even Marbella. Nearby in Montemar the bars like Tom's Tavern, Rumours and the Fig and Olive are well worth a visit for a cheap drink or a chat with fellow visitors of many nationalities.
Yes I would stay here again.