The GRT is hands down the best place to stay if you want to overnight within walking distance of Mahabalipurum's temples, but if you don't mind foregoing hotel comforts for a night or two, the village itself has a number of small, very basic budget lodgings, most of them located right on the beach, though everything in Mahabalipuram is within walking distance. Greenwoods Beach Resort (email@example.com) is neither on the beach nor a resort but offers reasonable lodgings and facilities for the price: Rs 950 to Rs 1,450 for an en-suite A/C room, and they offer a few hotel-like facilities (like airport transfers from Chennai and in-room massages).
The quality of the lodgings on the beachfront varies from year to year, with the best being the most recently painted or extended -- in 2009, Hotel Daphne (by no means a "hotel," but rather a small double-story sea-facing apartment block) was the latest addition to the seafront, and therefore offering the neatest, cleanest en-suite rooms at a mere Rs 650; bookings are through Anant, co-owner of Moonraker's (tel. 044/2744-2115 or -2811; http://moonrakersrestaurants.com). Located at 34 Othavadai St (which leads down to the beachfront), Moonraker's is incidentally considered to be Mamallapuram's best seafood restaurant: order your seafood grilled rather than fried, and/or ask for head and bones to be removed. If you prefer your seafood with a sea view, Santana (tel. 094/4429-0832 or 098/4078-9576; firstname.lastname@example.org), owned by the affable Babu Santana, has a beachfront deck where you can snack on plates of fresh grilled calamari and chips, masala-fried prawns and salad, or vegetable kuruma with chapati, while enjoying the view of the Shore Temple with the cooling sea breeze (you can stay here too but rooms are needing a coat of paint). Note that July through August is lobster season; Babu can also arrange outings on the traditional fishing boats that line the beach in front of the restaurant.
After the Great Temple Bay the so-called Ideal Beach Resort, located just a little farther north (3km/2 miles from Mahabalipurum), is your next bet; the older rooms are old-fashioned but with charm; the new wings are unimaginatively designed and horribly decorated, and are wildly overpriced. Opt for a standard cottage at Rs 4,500, and utilize the lovely pool area (tel. 044/2744-2240; www.idealresort.com; doubles Rs 2,750-Rs 12,000). (Whatever you do, avoid the Fortune Chariot Beach Resort -- ill-conceived and badly designed, with few sea views, and depressingly ugly. Not even the pool has a view, but faces the back-end of the presidential suite; given these mistakes, the rates are prohibitive.)