Where else have you stayed in Cozumel? If you stayed at, say, the Presidente, Cozumel Palace or any of the AI resorts on the south end then you might not be too happy with Hotel Cozumel. If you've stayed at places like Caribe Blue, Villablanca, Casa del Mar, or any of the other more budget minded places then it'll be fine.
I've only stayed at Hotel Cozumel once and it was right after Wilma when we didn't have many options. Location is fantastic and in my opinion that's really what you're paying for. Rooms are similar to what you'd get at a Holiday Inn, nothing fancy. The pool is really nice and the largest on the island, but the will be organized games and activities and music blasting through the speakers pretty much all afternoon, so keep that in mind when requesting a room location. (I would go for an "ocean view" room so at least you can get away from the pool noise on your own balcony.)
Don't bother with the AI package unless it's offered super cheap. You'll be about a 10 min walk from town.
Not too much to add to this but, wife daughter and I stayed there last June. I found the room quality to be about the same as the Fiesta Americana.
+ Close to town and the Chedrau (Walmart) store for supplies, within walking distance.
+ Several neraby dive ops with one on site-Dive Paradise
+ Suprisingly decent diving in front of the hotel, nothing spectacular but for $10 you cangrab a tank and cram an extra dive in.
+ Big pool and never an issue getting a lounge chair if so inclined
+ Friendly, attentive staff
- Hotel is showing it's age some, not run down but well-used
- Music from the pool entertainment Will be blasting until 10:00 every night. Request a room as far from the courtyard as possible. We asked to be moved after the first night and were unable to hear it from our new room, first night was unbearabl.
- Matresses harder than anything I have ever experienced before in a hote. We asked for foam pads but got blank stares from the staff. Wife saw stacks of them in the housekeeping storage closet so we "borrowed" a few.
That's about it. For what it's worth, I'm taking my daughter back diving again in November and will likely stay there again.