Pros (+) Walking distance from pretty much everything (bars, restaurants, palace, etc) but the museums (Prado and Reina Sofia). Good taste in the choice of furniture and design.
Cons (-) We had a room that was facing the interior "courtyard" which is in fact the hotel restaurant/bar, which makes it really noisy, impossible to sleep before 2am if you're lucky even with good earplugs. Sometimes it seems that the restaurant staff makes more noise than the clients. There is also no space reserved for the hotel clients such as a lobby or anything.