The Real La Merced is a beautiful hotel in an excellent location in a fascinating city and we very much enjoyed our stay there. The only problem is that the rooms can be a bit noisy from street noise as is is at the corner of a busy road (busy being a relative term in a small city like Granada) and across from the church, which is a beautiful view, but one that rings its bells at 6:30 every morning.
The building is very beautiful - a large old compound renovated to modern standards, with a beautiful courtyard and pool area. It is a pleasure just to sit in the courtyard or on the second floor and enjoy the space. There is a grand marble staircase and the lobby is pleasant. It was very airy and pleasant inside the courtyard, a very welcome break from the heat and business outside. There was a large urn of filtered water to fill your bottles with, which we really appreciated.
The room was very nice - a large and comfortable bed, very nice bathroom with good amenities, good sheets and towels, a safe and a balcony. Ours overlooked the beautiful and 400 year old Iglesia La Merced across the street, which was always busy and had a plaza full of people, so it was very interesting just to sit on the balcony and watch the plaza of the church as people went about their lives.
However, the church rang its bells every morning at 6:30 which woke us up. There is also a lot of traffic on the main street and even the cross street was busy with cars and pedestrians, so there is street noise. You are in a city and there are city noises, and since it is a small and very open hotel you hear all of it - car horns, traffic, sirens, hawkers, etc. This is not necessarily a bad thing, just be aware of it, most hotels in Granada would be the same or worse.
The breakfasts in the restaurant were very nice. Same Tipica or eggs you get everywhere, but in a very pleasant space. We chose to sit at the window and watch the street life. Hawkers walk by and show you their wares, but they are polite and move on when you say no, and you can watch church plaza and the people going about their business.
The staff were very pleasant and helpful. They were very concerned for our welfare and treated us very well.
The location of the hotel was perfect for us - it is very close to the centre of town and you can walk to Central Park, the Cathedral or restaurant area in 5 minutes through interesting streets, but it is far enough away from the noise and business of these areas. We would not have wanted to stay near Central Park or Calzada Street - very noisy and busy - but it was great to stay a 5 minute walk away and go there when we wanted. Easy walk to historic sites, bank machines, lots of restaurants and coffee shops. We felt very safe in this area.
Granada itself is a beautiful and interesting city to visit, full of culture and activity. We saw several religious processions and ceremonies and sat through a special mass at La Merced, even though we are not Catholic and could not understand it. The cemetery is fascinating, you should visit. Taxis everywhere and cheap if the hot sun saps your energy to walk. Granada is near to several excellent day trips, like Masaya Volcano, Mombacho and Las Isletas. Good restaurants and coffee shops, friendly people, safe and real life all around you, not just a tourist town.