My wife and I flew from Barcelona to Malaga, then rented a car for the drive to the Parador for a 2 night stay (If you do arrive by car, be on the alert. The entrance is hard to find. Look for the little guardhouse near the busstop). The room was pricey as were the meals, but if you want the convenience of being "there", it's worth it.
What was an outstanding meal for us was at the Restaurante Azafran, down in Granada, across from the river with a stunning view of the Alhambra, just a five minute walk from the shuttle bus drop off.

Loved the location and quiet, staying at the Alhambra was very special. We had a nice view of the Generalife from our room in the older section of the hotel. However, it is very expensive. The room was fine, but not the palatial suite we were both expecting. Breakfast was excellent, light meals at the bar were good, we did not end up dining in the restaurant. We had pre-booked Alhambra tickets but they actually have a limited number tickets for 10 am at reception, they kindly obtained a refund on our pre-booked tickets for us so we could purchase these instead. The front desk staff were all very helpful. All in all we enjoyed staying here but I might opt for a less expensive hotel in town next time.

Nice place but worth the money? After staying at a number of good hotels recommended in trip advisor, all well under 200 euros including breakfast, the price of 250 euros plus 15e pp breakfast was sticker shock. On a cold and rainy night, there was no inviting public space, and restaurant not as good as others in Grenada. Maybe, in the summer when you could enjoy the outdoor courts and fountains, but I'd recommend staying elsewhere and going for lunch after visiting the Alhambra in the morning.

On the Hotel:
After reading all the outstanding reviews of this particular Parador, we were a little disappointed that this hotel wasn't more spectacular. I am a professional interior designer and have seen many "blow away" interiors and architecture projects over my 30 year career. This was not one. However, it is nicely done. I am a particular fan of Spanish Colonial Revival, so did appreciate all the appropriate period pieces. Our room (212) that overlooked the Generlife was pleasant, but nothing special for the price. Our bathroom plumbing was a bit noisy with its knocking and clacking every time you turned on a faucet or flushed the toilet. We thought the food in the restaurant was ok but not great. However, we were pleasantly surprised that we didn't have to shell out nearly the amount of Euro that we were expecting to for dinner. The breakfast buffet, however, was outstanding.

On the Alhambra:
Remarkable. It's hard to describe and much harder to imagine the wealth of these former rulers to be able to construct/afford such a compound. I felt honored to be able to visit. Just wish there had been furnishings, too. It should definitely be a highlight of anyone's visit to Spain.

A tip: mind all the discussion about purchasing Alhambra entry tickets early - on line. We had done that in advance and the day of our reservation we just walked right up to the "reserved tickets" window on the left side and presto - had our tickets. (You can't order them ahead of time, as I understand). I read some discussion about buying tickets to the Generalife gardens for the next day, in case you didn't have enough time in your morning or afternoon slot to see them. We entered the portal gate #6 at 2:00(there are several different gates where you can enter the compound), visited all three areas (including the N.Palaces at our apppointed 3:00 slot) and were done with the entire compound by 6:00 pm. Our ticket was good from 2:00 to 8:00. So it can all easily be done in that time frame, I think.

Another tip: If you are staying at the Parador, don't park at the general public parking at the at the bottom of the hill. There is a driveway to the left (no swing arm) that will take you partway up the hill to the entry road to the Parador. There is a reserved parking lot for Parador guests/residents inside a gated area right at the Parador itself. We heard of people who parked at the bottom of the hill and humped their bags all the way to the top!! Don't do that - it's quite a walk. When you drive up the hill to the gate on the road to the Parador, a guard will ask you to show proof of reservation, then will let you through the gate and on up the hill to the hotel itself and it's private lot.

Granada is fun. Take the Red Bus (1 Euro) down to the city center and wander around. There are lots of tapas bars that offer you tapas and a beer for 1.60 each at certain times of the day. This thrilled my husband, as he is always on tapa alert!

All in all - I'm glad we stayed there - it was pretty magical to be right there at the Palace and look out on all that history. Sitting in the Parador's patio and having a drink was like being in our own private residence...there never seemed to be anyone else around. There is also a lovely salon on the ground floor where you can play cards, watch tv, or read a book. Since we were staying at the Parador, we went out after dinner both nights after all the tourist crowds had long departed and walked around the grounds. It was great with all the night lights on and looking out over Granada. That is an extra little perk to staying there at the Parador, we thought.