Just stayed in Hotel Atlantico earlier this year and highly recommend it for price, value, location and friendliness. They are remodeling all the rooms so you'll probably get a remodeled room. The rooms are small but what isn't in Europe in the value categories.
You walk right out on the Avenida Gran Via and can walk to the metro stop a block away. There is a Starbucks just down the street and tons of restaurants and shops within walking distance. All the tour buses leave just a few blocks from the hotel. I booked it on Expedia but you can book it direct with them for the same price and get breakfast included. I paid about $100 a night. They even give you slippers, a robe and lots of little toiletries, free wi-fi and a computer room. I'd go back anytime.