After reading the good reviews and the more recent not so good, we can report that the Captains Hotel is most definately in the very, very good category. Can't understand the negative comments, as having just got back, the hotel is spotlessly clean, the rooms are more than adequate, alright the balcony is a little small but we were rarely in our room.
Linen and towels changed three times in two weeks which was adequate. We never worry about a big breakfast as we have very little at home. What was provided suited us, coffee, juice, cereal, bread jam etc.
Great eating on the terrace. Fabulous location and very very friendly staff.
The Captains Bar is an experience, all ages, all welcome. Great music and Tina makes everyone feel special. Now the hotel has a great terrace bar for chilling out and listening to the music from across the road in the bar if you want to be a little 'romantic'.
For what you pay it's just great value. Whilst we there 'Shaun of the Deads' Simon Pegg was there for 14 days, he goes every year. If it's good enough for him then that says it all. He's a really nice guy.
Scala is a great resort one of the best we have been to. Would highly recommend Scala and the Captains House.

We picked the Captain's House largely on the strength of the positive reviews we'd read on a number of review sites. We also paid a small upgrade to get a sea-view room.

On the plus side:

The hotel is small and friendly and the terrace and lobby are both very pleasant. The location is excellent - 2 minutes walk from the beach and the town centre and as other reviews say, there's not much (if any) disturbance from the bar opposite. The rooms have a free minibar sized fridge (aircon costs extra - 40 euros a week at the time we stayed, but this goes up in high season when you'd probably need it).

However:

Our room was small and the ensuite bathroom was tiny (just enough room for a loo, basin and single shower cubicle - we're both 5ft5" and slim and even we felt cramped in the shower!).
The rooms overlooking the interior courtyard are much bigger.

An apartment block has recently been built next to the hotel - effectively blocking out the sea-view for some of the rooms on the first floor. This is such a shame as our view otherwise would've been fantastic. There was no point asking for a room swap - the hotel is fully booked until the end of the season.

The rooms don't have TVs (not a major problem to be honest - who needs one when there's so many restaurants and bars to go to?). Towels are not changed during a week long stay - we got told off by the cleaner for putting a dirty one in the shower.

The breakfast really is dire - a slice of bread, some packet french toast, jam, butter, cornflakes, juice and tea/coffee. Sounds alright, but the portions are tiny, coffee is weak and the juice very watery. If you need something a bit more substantial, most of the local restuarants have extensive breakfast menus and they're not expensive.

A bit about the island:

It's beautiful! We hired a car for 3 days (95 euros all in and we saw better deals than that) and travelled the length and breadth of it. Skala is great, but small and we'd definitely recommend you get out and about if you want more than a beach holiday.

The holiday Euro cost is making proper critique vital.
The rooms are now in modern terms fairly cramped especially the bathroom - totally inadequate in terms of space and lighting!
Furnishings newish but poor quality - beds ok though. There is absolutely no wow factor about it .. including the cocktails... better ones to be had in other town bars. The breakfast is lamentable and owners need to get their act together and for example,serve coffee at least that tastes like coffee and not ersatz! Reading some reviews and I do believe that some people have had very rose tinted glasses on staying here. If they served a breakfast like it in Pontins there would be a riot probably! If you can go SC elsewhere,then perhaps take that option. Roms were not cleaned very well.. eg dust under the beds never touched and a linen change just twice a week is not good! Don't get me wrong, it makes perfect base for the beach in Skala and island exploring. We liked the ambience in Sugar Lemon bar as a contrast to the overhyped Captains Bar. The overall impresion is that, the complacent owners are looking to profit margins with the guest experience pretty low down on their priorities. So, if you seek value for money, perhaps seek elsewhere until changes here are made.

Me and hubby have stayed at this accommodation 4 times now over the past 7 years.
Every time it has been a comfortable stay and the owners are very welcoming and help out if you have any enquiries.
Rooms are basic but roomy and our room had a balcony, two double beds with plenty closet space and you can pay for additional air con if you require it(between June and August most definitely)Roughly about 40 euros a week. Maid service is daily with fresh bedding 3 times a week.
The captains house bar by tina and monica is truley fantastic. Superb aptmosphere and cocktails. They recently added more seating to the bar which now sports amazingly comfy loungers and lovely tables,flowers and acessories that wouldn't look wrong in a swanky bar in London!The breakfast is not much, consists of a couple of pieces of melba toast and cereal as well as the usual coffee and orange juice.There is no pool but it is a 2 min walk down to the beach or several pool bars in other hotels which are free to use if you buy drinks.
There is a little garden to the right of the hotel and even though it is very pretty and well kept it doesnt get used much as the town of skala is so beautiful to wander round than sit in the garden all day.
we have been to skala 6 times now and used captians house 4 times due to its location, friendliness and comfort.
location could not be better,1 minute in any direction to bars/restaurant or the beach.