We had reserved two rooms for one night and arrived very late that night (around midnight) with two children under the age of three. First the pros: the people were very nice, as everyone we met in Costa Rica were. The breakfast that was included in the room rate was very good and substantial. A la carte items are available for additional cost, but the buffet provided has every food group you need. The hotel is located on the beach side of the main street and within easy walking distance to the beach. It is also next door to a shopping area that has good places for food, coffee, apparel, pharmacy, and banks (ATMs). The pool, though small, was clean and nice for the children to play in. The rooms had air conditioning that worked well, as well as fans, which together helped muffle the noise that came from the local restaurant/bar even late at night.
The cons: the rooms were only moderately clean. In our room only one nightstand lamp was in working condition, the sheets had tears in them, making sleeping difficult when your foot got caught in the tear. The only amenity was soap. Neither nightstand lamps worked in the second room. There was no hot water in that room's shower, and the sheets on the sofa bed for the child were not clean (we moved sheets/blankets from the first room and remade the bed).
We made do because of the lateness of the hour,because the person who showed us to the room was not the regular front desk person, and because we were only staying the one night, so our goal was simply to get some sleep, which we did. Given the other reviews on this site, however, we were very much disappointed.

Hotel Playa Carmen is an excellent place to go when you have a limited budget and want to be near the sea at an affordable price.
The rooms have TV, AC, Hot Water, Balcony, among others. Cleanliness is very good, except for the walls of the hallways, but otherwise the place is much more than you expect for the price paid.

There were a few changes this time around. Breakfast wasn't included in the rate. Ended up eating in the bakery in the strip mall.
The bar had closed ( seasonal?) but other than that all the reasons I, and now my wife love this place are the same. Near the beach , heart of town, clean and the air conditioner worked really well!
They carpeted around the pool spent a nice amount of time unwinding gettiong ready for a night introducing my wife to the best chicken in the world Las Piedras. The desk person recommended we try ther mash potatoes and are we glad we did. divine!
I am booking another stay in February 2011, will keep you posted on changes and if this is still the place to stay in Mal Pais. Took wife for 20yr anniversary.

Our stay was very pleasent. The hotel was clean and near everything. We had the time of our life. Although, be sure to pay your reservation in CASH!!! Do not give them your credit card number under no circumstances. When I got back home, I found out that my credit card number was stolen and charged more than $5,000 in stores around the south of Spain. The receptionist was sort of bad-tempered at times. But besides all that, everything was fine.