One of the most popular budget options, Casa Arnel (Aldama 404, Colonia Jalatlaco, tel./fax 951/515-2856, casa.arnel [at] spersaoaxaca [dot] com [dot] mx, www.casaarnel.com.mx , standard rooms $35 s, $40 d, $50 t, shared bath $15 s, $25 d) is also farthest north (actually, less than a mile) from the zócalo. Casa Arnel stands at the edge of downtown, so removed from the urban bustle that it feels as if it’s embedded in another era. As one local resident explained, Jalatlaco, the formerly separate village, is “old, with stone streets . . . It’s so Oaxaca.”
Casa Arnel is a family home that grew into a hotel, with about 20 rooms around a jungly garden blooming with birdcalls, flowers, and big, leafy plants, with a monument of a library in the middle of it all. Additional amenities include a broad roof deck with umbrellas, tables, and chairs for sunning and relaxing. The standard rooms, all renovated, are attractively furnished with new bedspreads, curtains, and shiny furniture and fixtures. There’s a travel agency, a decent restaurant, and it’s just three blocks from big, shady El Llano Park with its good restaurants and services. Bargain for a cheaper long-term rate.
Much closer in, halfway between the zócalo  and Iglesia de Santo Domingo , right in the middle of the tranquil Calle Cinco de Mayo restaurant and shopping district, find the old-fashioned Hotel Principal (Cinco de Mayo 208, tel./fax 951/516-2535, hotelprincipal [at] gmail [dot] com, $29 s, $33 d, larger, superior rooms $53 d), like a slice out of the 1940s. Past the entry, the two stories of 14 rooms surround a quiet, geranium-decorated interior patio. A few sofas line the patio and upstairs corridor. The rooms are clean, with high ceilings, tiled floors, and shaded bed lamps. No TV or phones, but with hot-water baths all day. All rooms have private shower-baths and fans, but no parking nor credit cards accepted.
A few blocks farther north stands another well-located budget choice, the Hotel Villa de León (Reforma 405, tel. 951/516-1958, fax 951/516-1977, $30 s, $40 d, $45 t), adjoining the back side of the Iglesia de Santa Domingo grounds. Past the reception and inner-courtyard restaurant, most of the approximately 20 rooms encircle an upstairs balcony. In the past, accommodations were cheap and often in need of repair, but renovations are under way. All rooms have hot-shower-baths, and credit cards are accepted. Reserve a room away from the heavily trafficked street.
Nearby, budget-minded travelers should also consider the inviting Hotel Maela (Constitución 206, tel./fax 951/516-6022, maela [at] prodigy [dot] net [dot] mx, www.mexonline.com/maela.htm , $41 s, $46 d, $60 t, suites for four $70), one block east of the Iglesia de Santo Domingo  compound. Inside, just past the small reception, the hall tiles shine, the ceilings are gracefully high, and the 24 rooms and two suites, in two stories, are spacious, with private shower-baths and attractive handmade wood dressers, beds, and end tables. Ceiling lights are bare-bulb, but nighttime reading lamps are shaded. Rooms come with fans, TV, wireless Internet, and parking.
On the northwest side, about three blocks west of the Iglesia de Santo Domingo, is the very inviting and super-popular Hotel Las Golondrinas (Tinoco y Palacios 411, tel. 951/514-3298 or tel./fax 951/514-2126, lasgolon [at] prodigy [dot] net [dot] mx, lasgolonoax [at] yahoo [dot] com, $42 s, $46 d, and $55 t). Rooms enfold an intimate garden, lovingly decorated with festoons of hothouse verdure. Leafy bananas, bright bougainvillea, and platoons of potted plants line pathways that meander past an intimate fountain patio in one corner and lead to an upstairs panoramic vista sundeck on the other. The care also shows in the rooms, which are immaculate and adorned with spartan-chic, pastel earth-toned curtains and bedspreads and natural wood furniture. Guests additionally enjoy use of laundry facilities, a TV sitting room, a shelf of paperback books, and a breakfast restaurant open 8–10 a.m. In addition to the 27 regular rooms, two honeymoon suites rent for about $55 each.