I have stayed at the Palm Bay Guesthouse a number of times when in Montego Bay and I have always had a very good experience there. The term "guesthouse" doesn't really describe the property - in Jamaica the term "guesthouse" just means a small hotel, and in the case of Palm Bay, they are very much a full-service hotel, having a very good Jamaican restaurant, a bar, and a jerk center onsite. They are not adjacent to the beach, but are a 5 minute taxi ride from the Hip Strip and Doctor's Cave Beach.
The restaurant's menu changes daily and, while jerk chicken is always on the menu, there is always a variety, and the food is always flavorful. The restaurant and bar are both popular with local Jamaican business people and the parking lot is often filled with expensive cars.
The two things that really stand out for me about the Palm Bay Guesthouse are service and cleanliness. It is by far the cleanest hotel I have ever stayed at anywhere - you could eat off the floor in your room. Palm Bay is a family business and the service there is very friendly, welcoming, and considerate. Small touches, like the maid waiting for you to come out for breakfast in the morning and then cleaning your room while you are eating breakfast, are rare qualities that only a small property like Palm Bay can offer.
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