We were actually surprised to find such a nice hotel in Arba Minch. We paid 450 Birr including breakfast for very good and clean room and a good bathroom. The hotel even has Wi-Fi. The only problem is the music played in the hotel garden that literally shakes the room. They turn it off at around 9 or 10pm, but if you want to go to sleep earlier (there is not much to do in most of Ethiopia once it gets dark), ask them politely to turn it off.
And keep in mind that you are in the South, in the malaria area. We actually saw 4 or 5 "malaria" mosquitoes on the wall of the hotel at the ground floor (the rooms are on a higher floor). The hotel has mosquito nets, but you are advised to use the repellent at night.
In case you are curious, regular mosquitoes are parallel to the surface on which they sit. The malaria-type mosquitoes are not parallel - their heads are down, much closer to the surface, while their behinds are up.More