I see there have not been any reviews for quiet some time. Let me update the status and I believe that it use to be a B&B but now is a hostel. My stay was in November 2011 and I was paying 12 USD per night for a dorm bed.
Lets start with the good. There are spacious dorms and huge lockers, big enough to fit large backpacks or medium size suitcases. Everything was cleaned every day. There is a small swimming pool which was lovely. It had accompanying sun beds with mattresses. There was a covered verandah / lounge witch had cable TV and board games. The kitchen is fairly well stocked with utensil but it had no basics (free or for sale). For example there was no tea or coffee which many top hostels do have.
Once you have booked the hostel sends you an email with detailed instructions of how to get to the hostel as well as how to get to Cozumel. A great touch I though.
The location is not great, a good 15 minute walk to the center of town. Bicycles and scooters are not cheap to rent on Cozumel either, 12 and 20 USD per day respectively. If the hostel could get some bicycles for rent at a more reasonable 5 USD a day I think this would make the location much better as well as providing some extra income.
The major let own for me was that the wi-fi did not work the whole 5 days I was there. Wifi is standard for any decent hostel these days. Cozumel is not a party island so people come more to relax and scuba dive. Therefore, not having a reliable wifi and with the remote location, my rating dropped from one of the top few hostel I have stayed at, down to a good hostel.
