I spent two nights in the dorm. For $15 a night, I can not complain. It is conveniently located a block behind the zocalo closest to the ferrie dock (pass the clock and look for the church then take a left). There is a cheap internet place next door, and plenty of bars and restaurants and all the very close.
There does not appear to be any airconditioning, but there are some ceiling fans (havent seen them turned on) and a few beds with fans near them. There appears to be a pillow shortage, and blankets are not provided (OR needed because it is very hot).
A lock is provided for the individual lockers. The lockers are large enough to fit two slim, or one big fat stinky hippie corpse into easily....which I think my locker had recently held for at least a few days. The reek of sweat and BO was outstanding. So much so that I could not bare to put anything inside. The whole room reeks of sweat, and I don't know, but there´s a possibility it is all because of the horrible stench of locker number 14. The bed is a little stinky too, but otherwise comfy.
The bathrooms are together on the car endo of the room. There is a set of beds outside the door, and I pitty the fool who ever ends up in them. The ladies room has no light in the showers, but the pressure is good (left is hot water. They are unmarked and it takes awhile). The bathroom doors are loud aluminum quarter doors, with loudly clacking stall doors (on 2 out of three shitters). The set up, in addition to being loud any time anyone passes in or out, seems to amplify all sounds from within the bathroom area (including showers and toilet activities) for all in the bunkbeds to hear. It can get a little embarassing. There are also several little weird steps in the flooring that are easy to stub toes on and trip off in the dark area. Beware.
There is a seperate entrance to go up to the roof where the kitchen is, as well as some nice hamocks and lounging areas. It is prretty nice. They also have hotel rooms, which I would consider if I was not travelling solo.

We stayed here for 5 nights and were so happy with every night of our stay. This place is a hostel which has a common area where it is easy to socialize and meet other travelers but it's not a "party" hostel. There was a kitchen equipped with everything you needed to make your meal.

We had a private room with an ensuite and we super impressed with the size of our room and bathroom. For the price we were paying this was amazing value. Our room had air conditioning (important aspect with this heat). The shower always had hot water.

We did have some problems with the free WiFi but most of the time internet access was available. The hostel is located in town, within easy walking distance of the ferry. It is in a safe area, with lots of restaurants around.

The staff were very helpful and our room was cleaned everyday with new towels etc.

If you are staying in Cozumel on a budget, this is the place for you!

I hated this hostel, if there was another one I would have moved immediately. When I arrived I found dead bed bugs on my pillow and the girl next to me had live ones on her bad. To the staff's credit they have 4 of the bunks sprayed immediately but not the rest of the 26 bed dorm as it was being sprayed in 5 days time. They need to shut down, burn the mattresses and deal properly with this infestation.
After the first spray the staff didn't care that people were getting bitten all over, they just turned away and shrugged. Fortunately my bed seemed ok, no bites, hence I stayed for 3 nights as I was diving and couldn't afford a hotel.
The actual dorm is stuffy, no proper ventilation, it isn't clean - same crap on the bathroom mirror was there 4 days later.
Asking staff for suggestions of where to eat, watch world cup proved fruitless. They did recommend the place opposite (fabulous big breakfasts!) but I later found out they are affiliated.
If you have another option go somewhere else, this is a dive and should be shut down and cleaned properly before being allowed to open to the public. They've also raised the rates to rub salt in the wounds - if you do have to stay flash the lonely planet guide which quotes 120 peso, rather than the 160 they are asking for now.

I been traveler and stay in hostel around mexico and in teh worls, and believe me this is one of the best!! The people really help you if you need something, and they also give you the correct information about food, diving , etc... Plase ask for susano or Alfonso the are really cool people, and honest! The hostel its really clean, quiet, and confortable.. I love it!!!