Hotels in Berlin - optimal locations and triple rooms

Berlin has a large central area with several different core districts, all with different flavours. You'll need to do a bit of research on which one has most of what you are interested in - all of them have good links to the others by public transport.

Six years ago we (4) stayed in Pension Peters all in one room. Buses, U-Bahn and S-Bahn stations are very close. We did only buses and got around pretty well.

There are plenty of restaurants and bars near the Pension Peters, even a 24-hour cafe. And owner Uwe is super.

Yes, we plan on going to several Christmas market but haven't chosen which ones yet. Advice on those as well is welcome.

Berlin is huge. Public transportation is excellent. It's easy to get pretty much anywhere fairly quickly.

I highly recommend mittendrin in the former West Berlin. I've spent about 30 nights there over the last 3 years. Owned by the lovely and vivacious Sabine, a former stage actress. She's converted a flat in a building that dates to the early 1900's (survived the war!) into a 4-bedroom "boutique hotel"/B&B -- wonderfully updated while maintaining its original charm. There is one room that works as a triple. AMAZING breakfasts at a communal table. Two blocks from Kaiser Wilhelm Church and Breitscheidplatz Christmas Market. Two blocks from KaDeWe. Three U stations within a couple of blocks. Zoo station (U+S) is a very easy 10 minute walk. Ranked #1 on Trip Advisor for B&B's/Inns in Berlin with good reason.

I don't know about your budget but when we were looking for a hotel in Berlin for three people, we chose the Adina Hackescher Markt. Located in Mitte-just inside the former East Berlin. They have a one bedroom with sofa bed that could work for your family. Berlin, like London is very spread out so there is no one best location.