The hotel is only a 10 minute walk up a forested hill to the entrance of the actual Alhambra. And for us, the location was everything: We tried to book direct tickets to the palace on line a few weeks in advance of our visit, but the park was sold out during our stay. However, there are a limited number of tickets to visit the Sultan's palace right when it opens. Due to the close proximity of the hotel, we were able to trudge up the hill at 7AM (in the dark!) and wait in line before it opened. We visited the palace using the self-guided audio tour, were able to walk back to the hotel for a late breakfast, and then walk back to the Alhambra to visit the rest of the site. Of course, being near the park means you are NOT in the center of town near the night life, but it was worth it to us.
The hotel actually dates from the very early 20th century, is decorated in Moorish kitsch (think if Disney were to build a Moorish hotel) and given why you are probably in Granada is a rather fun experience. The Parador and some other smaller hotels are deep inside the park itself, definitely more intimate and authentic if you can get reservations, but are not that much closer to the ticket entrance.
The hotel staff is average bordering on surly at times (especially the bartenders!), with one outstanding exception: At the front desk, ask for Irene. Irene lived in Florida for many years and speaks fluent english. She was professional, charming, and passionate about ensuring we enjoyed our stay and had great recommendations for restaurants, tapas and shopping. Irene made a huge difference in our stay of Granada.
Our room, decorated in pleasant orange tones was blandly comfortable but certainly didn't give the Moorish atmosphere of the public rooms. Furnishings were of average quality. Bathrooms were rather small, but are completely tiled in dark green (almost black) and white tiles. The toilet was inconveniently wedged in next to the sink at a 90-degree angle. Cleanliness was passable but not spotless. Beds were comfortable but not of "Westin" level. We had trouble getting the A/C to make our room cool enough at night. We had asked for a balcony room, which had spectacular views day or night overlooking Granada.
Breakfast buffets included a large variety of eggs, breads, cereals, fresh fruits and juice, and meats. Quality was above average. Service was friendly but almost non-existent after they brought the coffee to our table. Dirty dishes definitely built up in piles after making successive trips to the buffet!
We used the front desk at the hotel to book us a private guide to visit the Alhambra again the next day (we had been too busy snapping photos the first time it is so spectacular, we really felt distracted from the historical aspects). Private guides and tours automatically get in through a different entrance with their clients, no reservations are necessary. The private guide price (over $300 for 3 hours) is not for the faint-hearted but was worth the additional historical insight to what we were seeing. They also booked us a Granada city tour in the afternoon at an even higher price, but given how poorly everything is marked in town (seeing Queen Isabella's crown and jewelery box from whence she gave the jewels to Christopher Columbus for instance) needed if you want to know what you are seeing.
Given the ultra-convenient location however, I would still choose to stay here again over staying downtown, despite the service shortcomings.