I've stayed here now a couple of times on trips to Graciosa, most recently in Aug 2014. Set near the square in Santa Cruz, it's within easy walking distance of restaurants and the harbour. Internet in the lounge and lobby, but it's fast with plenty of chairs if required - and there's a small hotel bar too.
Rooms vary from dark in the ground floor to airy and spacious higher up. There isn't air conditioning if it's hot but reception provided a fan. Clean rooms with all the basics that you need. Sitting in the lounge area is far more pleasant.
Breakfast wise it's typical of the Azores. Bread and cheese, bread and ham but that's standard across the islands.