Granada has the best selection of colonial-style hotels in all of Nicaragua. Even the most humble hospedaje will have an atmospheric courtyard and gallery with rocking chairs beneath arched pillars. That said, the rooms themselves may strike you as small, with tiny bathrooms and dangerously steep stairs, especially if you have had one cerveza too many late at night. The high prices (remember, most hotels quote prices without 15% tax) do not often reflect quality or good service, so shop around before you decide.
Inexpensive -- Hospedaje Central (tel. 505/2552-9500) is a popular backpacker hangout with over 80 beds and a lively social scene. It is not the prettiest property in town, nor the cleanest, but it offers bargain bunk beds for less than $6 a head and also has a cafe. Private rooms are also available. Its large, rambling building is located 1 1/2 blocks east of the central plaza, on Calle La Calzada.
Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.