The Lotus Hotel is on the bottom of Cau May Street, turning left onto Muong Hoa. It is actually slightly off the street, so you have to walk a few stairs up before reaching the main entrance where you can find reception. The hotel has 3 floors with 4 or 5 rooms on each floor.
The rooms are rather spacious, either containing two or three beds, and have an en-suit bathroom. The bathroom have the typical Vietnamese set up of the shower being next to the toilet. The rooms have no fireplace, so if you visit Sapa when it is cold ask for an electric heater. However, I would highly recommend not keeping it switched on while you are out or asleep.
Also, check out the room first, as I saw one or two rooms where you could smell some slight mould.
On each floor there are chairs and tables outside the room on the shared balcony offering a very nice view over the surrounding area. So if possible try to get a room on the top floor and sit down with a cold beer or another drink to enjoy the view.
The hotel offers laundry service, and the most important part is that they lock your main bags in their office when you are doing a multi-day trek. So no need to carry your main bags with you.
Overall the hotel was good value for the price of 260.000 Dong.
(Stayed here December 2014)