Having never stayed in Mexico before, speaking very little Spanish and not knowing what I was getting into, I was very pleased with Hotel Palacios! We booked it for a few days right after Christmas with not much time to spare so we weren't sure what to expect! But the room was nice with AC and a refrigerator. The bathroom was nice with "warm" water - never really got hot by any means, but you could easily take a decent shower. Did not have any problems with things being taken - everyone was very nice and accomodating. (There was a safe in the room as well where you set your own combination, so we put our passports & money in there whenever we left just to be sure.)
The hotel is right at the beach - their restaurant is literally on the beach and you can even sit at a table on the sand. Very small pool, but we weren't there for a pool so that didn't matter.
It was affordable and convenient to most things we wanted, so I was very pleased with this hotel! Would recommend to others!

This hotel was like heaven after no A/C and climbing the miles of stairs at Catalina Beach Resort. Save your $$ and go here first. It's right on the beach. There are coffee houses and restaurants on the same street and on the beach. Don't try the fish tacos at Restaurant Rene. Taxis are handy.

The rooms are clean and fresh. We had the best room in the hotel (#118) for just $80 a day. It was large with A/C and a fridge and 2 double beds and a huge private balcony. It had a good shower with plenty of hot water. The owners are very friendly and helpful and speak English. (my Spanish is sometimes not up to par) They even did a little laundry for us the day before we left because the laundry service up the street was too busy. You will not find better.

My wife and I walked up to a few hotels in the Colonia Madera area of Zihua and found this gem located right on the beach. It had a perfect view of the bay, a deck, AC, fan, cable, and private bathroom. Very clean and walking distance from town. $80 per night for the best room (#17) in the hotel.