We enjoyed our stay at Hotel Carmel. The location is great, the service was friendly, the room was clean and comfortable, and it was inexpensive for the area.
The thing to remember is that this is a historic hotel, built in 1928 and family owned since the 1940s. When staying at this hotel, you have to keep that fact in mind when setting your expectations. Much of the original hotel is still there, and it has the look and feel of an old hotel. Nothing felt dirty, but things felt dated. It had the feel of an older beach hotel, which it sort of is (based on its location). Noise was not an issue for our stay, but we also slept with a white noise machine we brought, so your results may vary.
I'm glad this hotel is there, and I would stay there again. There are plenty of new, luxury hotels a block away, but they are double or triple the price. The owners could spend a fortunate renovating the place, but then it would cost more; plus, there is very little historic L.A. left. It's nice that a piece of it, even with its flaws, is still around and at a good price.