The AC Resort II was recommended in the Lonely Planet, so we checked it out. It is similar in quality to many of the other beach properties I saw in Ko Tao. However, I was not satisfied.
Pros: It was inexpensive if you did diving with Phoenix Divers next door (they cut the rate by 50%) - I think we paid 1000 baht a night for each room (slept 2-3 people each). The restaurant directly in front was delicious. The pools was decent.
Cons: The toilet didn't flush on its own, you had to poor water in it. They only gave you one small blanket (no sheets) to cover yourself at night. The A/C was either completely on or completely off, which was annoying. They only cleaned the room in between stays. The beds were hard. The bathroom did not have a separate shower, but just a shower head over the toilet.
We decided to move upmarket to a place directly on the beach for 2000 baht a room. We gained a softer bed, a much nicer bathroom.- I thought it was worth it but of course it depends on your budget.
One other word of advice -- I can to Ko Tao to do some diving. Turns out everyone else had the same idea! The first spot we went to have no less than 12 dive boats already there! I was consistently, and literally, bumping into people under the water! I wish I had chosen a place a bit off the beaten path -- but of course still had a fantastic time. It is a great to learn to dive and meet people.
This review is the subjective opinion of a TripAdvisor member and not of TripAdvisor LLC.