There are some real cheapies in downtown Guatemala City [1], traditionally the city’s budget accommodation headquarters, though there are also some nice budget options outside the downtown area now, so you have to stay in this slightly dodgy part of town only if you really want to.
A longtime favorite with the backpacker crowd, Pension Meza (10a Calle 10-17 Zona 1, tel. 2232-3177) has shared-bath doubles for $7 and rooms with private bath for $12 d. It’s somewhat dilapidated, though the graffiti-strewn walls have a certain charm and the beds are good enough. You’ll find a courtyard, Ping-Pong table, and book exchange.
Hotel Fenix (7a Avenida 15-81 Zona 1, tel. 2251-6625) is a good budget value with clean rooms. It’s also quite secure. There are shared-bath doubles for $7 (upstairs and quieter) and rooms with private bathroom for $10 d. It has a bistro with excellent sandwiches and areas for hanging out.
Hotel Ajau (8a Avenida 15-62 Zona 1, tel. 2232-0488) has 44 rooms, including shared-bath doubles for $12 and doubles with private bath for $19.
Hotel Spring (8a Avenida 12-65 Zona 1, tel. 2230-2858, hotelspring [at] hotmail [dot] com) is a good value with clean, pleasant rooms. It has doubles with shared bath for $18, older rooms with private bath for $23 d, and quieter, newly remodeled rooms with private bath for $33 d.
A cheery three-level place, Hotel Excel (9a Avenida 15-12 Zona 1, tel. 2253-2709, $23 d) has rooms with private hot-water bath.
The architecture at Hotel Colonial (7a Avenida 14-19 Zona 1, tel. 2232-6722, www.hotelcolonial.net [2], $19–30 d) is just as its name implies, with tile floors, wrought iron, and dark hardwood accents. Its spacious rooms come with shared or private bathroom.
Across from the police headquarters is a perennial favorite in this budget category, Chalet Suizo (14 Calle 6-82 Zona 1, tel. 2251-3786, $27 d), with 47 spotlessly clean rooms, all with private bath, built around sunny courtyards.
On a quiet side street, another fine choice is 
Posada Belén (13 Calle “A” 10-30 Zona 1, tel. 2253-4530, www.posadabelen.com [3], $49–60 d), an 1873 home converted into a lovely museum inn. It has 10 rooms with tile floors tastefully decorated with Guatemalan bedspreads, paintings, and weavings. Its gracious hosts, René and Francesca, speak English and can help you plan your journeys into Guatemala’s rugged interior. Amenities include telephone and Internet access. All rooms have private bath and rates include breakfast. Other delicious homemade meals are available upon request.
Hotel Quality Service (8a Calle 3-18 Zona 1, tel. 2251-8005/6/7, wwwqualityguate.com, $40 d) has 22 recently renovated tile-floor rooms with private hot-water bath, cable TV, and desk. Rates include a Guatemalan breakfast of eggs, beans, bread, orange juice, and coffee or tea.
Oozing with history is the landmark Hotel Pan American (9a Calle 5-63 Zona 1, tel. 2232-6807, $50 d), which was once Guatemala City’s go-to property, having been established by its namesake airline. Rooms have tile floors and are nicely decorated with Guatemalan artwork and furnishings. The dining room, serving international and Guatemalan dishes, is well known for its antique charm and elegance, with waiters wearing traditional village attire.
Another elegant downtown property is the Hotel Royal Palace (6a Avenida 12-66 Zona 1, tel. 2220-8980, www.hotelroyalpalace.com [4], $55–65 d), where the spacious, comfortable rooms have attractive traditional paintings, reading lamps, cable TV, and wooden furniture. There are standard rooms and larger junior suites to choose from. Other amenities include a workout room and an executive floor. Rooms facing the street have balconies and the property is wheelchair-accessible.
Links:
[1] http://www.moon.com/destinations/guatemala/guatemala-city
[2] http://www.hotelcolonial.net
[3] http://www.posadabelen.com
[4] http://www.hotelroyalpalace.com