I just stayed at Damal Hotel in Hargeiesa for 4 nights. It was the best hospitality I have received in Africa on this 2 months trip. The staff is VERY kind and always offering a hand to help. The rooms are cozy, and the location is right in the middle of the town with street markets all around you. The rooftop offers some of the best views of Hargeisa. And their restaurant serves any kind of cuisine - from international to local - and is not overpriced. You have to try their grilled fish!
I can't imagine staying in Hargeisa at any other property - Highly recommended!