For those looking for a nice, colonial style hotel in the center of Guatemala City (and also secure), Hotel Spring is one of the best choices, since it offers a very characteristic patio, helpful staff, a good location and more than reasonable prices (about 22 USD/double room/night, as of september 2006). Rooms could be nicer, but are clean and fulfill all necessities.

Hotel Spring was the choice of many members of the international Peace Brigades and still used by many younger Guatemaltecos while spending time in the capital (which has actually enough to offer).

Food is more than OK and from there you may enjoy a little walk into the heart of Zona 1 (check the security situation with the hotel staff, they will tell you better than any embassy).

I was at that hotel on 2003 summer with five colleagues. I've to confess that I'm mainly customer of the mai chains like "Le Meridien", Hilton, etc... and "Sping" was absolutely different.
Sping is not a luxury hotel, maybe you can give it 2*, but has some "charm" and is very cheap. I remember my big room like a country house, queen size beds, and a lot of wood. It's also clean. But the better is the "patio" in the center, with tables ans chairs. You can take your own food and eat there, sorrounded by nice flowers. There are no corridors but nice arcades also with nice plants. I very nice place to stay in Guate.