I stayed here for 2 nights after 5 nights on the Kinabatangan river.It is in town with wi-fi and free breakfast.

we stayed at the sandakan hotel for 1 night then went to turtle island, and hadnt booked anywhere for the next night. a couple we had met suggested the london hotel as it was about 15usd a night, compared to the 65 usd at the previous hotel.
the room was fine, its nothing flash for what you pay, we have never stayed in such a cheap place so we were a bit unsure, however we thought it was fine.
the BIG DOWN SIDE is that its right next to the mosque. who have pray ceremonies over loud speakers until around 10 or 11 at night and then again from like 4am onwards. this really didnt help us get any sleep.
so for 1 night id say its fine, but for more than that, maybe try else where.

London Hotel is OK, little walk to centre town. Staff friendly but not too knowledgeable.

This place will do the trick if you need a place to stay for the night but it is nothing special. They do have internet, beer, and water for sale so you don't have to go far. The breakfast included is white bread toast and bananas, so you might want to find something else. Not great value for your money but not bad either.