Ditto on the recommendation to stay in or near Downtown, and DO NOT DO All-Inclusive in Cozumel. I don't have anything against AIs, and at some destinations they are the only way to go, but not Cozumel -- Cozumel is very safe, very friendly, and has a wealth of great eating options, in every budget category. So I just will not do AI on Cozumel. Most of the very good restaurants are in the Downtown area, so anything within walking distance, even down as far as Hotel Cozumel (which does have an AI option, but DON'T take it - the Hotel is nice, but the Food is terrible) is very convenient for walking to lunch, dinner, or shopping. There are a lot of options downtown, from Casa Mexicana and Suites Bahia to little low-cost hotels and B&Bs farther back in town. If you want a more "Resort" feeling, big swimming pool. Little beach area (not a real beach, you'll need to climb down a ladder to get into the ocean), relatively easy walk to town (about 10-15 minutes, depending on your pace), there's Hotel Cozumel. Farther south, an 80 Peso taxi ride (about $5, as long as you get Pesos at the Bank or a Cambio) into town, or a 35-40 minute walk if you like to walk, is Casa Del Mar or El Cid. Lots of good dive ops. My favorite is Aldora, because I like the HP Steel 120 tanks, the long bottom times, and the long surface intervals at a beach club, but as noted, there are several other excellent ops - Tres Pelicanos, Blue XTSea, Living Underwater, Dive with Allison, Dive with Martin (not a higher end valet operator, but an excellent lower-cost option if you are staying farther south, like at Casa Del Mar or El Cid), and others. Every long-time visitor has his or her own favorites. I've never stayed North of Downtown because it's much less convenient to diving, but Villa Aldora might be a good option - it's north, but still an easy walk into town, and Aldora boats pick you up right there.