Palma is a great city - pretty much has everything - sun, shops, sites, ice cream...! Well worth a visit to the castle (the red sightseeing bus takes you there, the castle is the best stop on the route, 13 euros for a 24 hour ticket) and inside of the cathedral is a lovely surprise (4 euros)
The Costa Azul hotel was exactly what we wanted - easy access to the city sites (on foot or by one of the many buses), great views of the lovely yachts (there is obviously still money in the world!) and from the rooms on the upper floors you could see the cathedral. The busy road does make it noisy on the balcony but it's well worth it for the views and you cannot hear the traffic when the 2 double glazed doors are closed. Also it was the biggest hotel room and best shower we've ever had!
Considering this is a 3 star hotel I would say there was nothing really wrong with the food. Both breakfast and dinner were plentiful with great variety (although i agree vegetarians would struggle).
We didn't have any trouble finding anywhere to buy water - there was a shop 4 doors along open until 10pm and other shops nearby. For basic groceries there was a shop in the street behind the hotel but supermarkets are further away.
Overall I would say this was an exceptionally well run, clean and friendly hotel.
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