For budget travelers, Hospedaje Lidia (half a block west of the Texaco station, tel. 505/2563-3477, $8 pp shared bath, $12 private bath) is the most popular and has a dozen clean rooms, including large rooms for up to five people.
At the southeast corner of the church is a nice alternative, Restaurante-Hospedaje El Español (tel. 505/2563-0006, $10 pp), a pleasant corner place with a friendly and atmospheric bar and smoking room in the front sala. In the back are four simple rooms; each pair of rooms shares a bath.
Hospedaje Primavera (next to the Shell station, $5 pp private bath) is a bare-bones lodge catering mostly to working Nicaraguan expats on their way to and from Costa Rica. If you get stuck, you’ll find a handful of similar, unremarkable but inexpensive ($5–7 pp) places to stay within a block or two of Primavera.
Hotel Cacique Nicarao (a block west of the park, tel. 505/2563-3234, www.hotelnicaraoinn.com.ni , $69 includes tax and breakfast) is efficient and modern with cable TV, air-conditioning, Wi-Fi, a guarded parking lot, pleasant lobby, and attentive staff. You can arrange rides to San Juan del Sur  and other parts here.
If you’ve got a car, outside the city limits and down the highway at the empalme (turnoff) to San Juan del Sur, you’ll find Hotel and Restaurant La Mar (www.lamarlakeresort.com , $60 plus tax, includes breakfast), with a unique lakeside swimming pool. Each large room has a front porch with terrific views of Ometepe ’s twin peaks. Major League pitcher Dennis Martinez owns the place, so it’s decorated with lots of sports memorabilia.