Hotel America or Alhambra Palace Granada

Unless you plan to only visit the Alhambra while in Granada, I would encourage you to consider staying in town. The Alhambra is above the actual town and there really isn't anything else to do up there besides visit the Alhambra.
We really enjoyed staying in the Cathedral area and seeing the town - during the time we weren't visiting the Alhambra.

I loved staying at the Hotel America. It's a short walk or shuttle ride down into town (or walk down and ride up), so it's not inconvenient that way. I especially liked it because I booked the very first entrance time, and then it was exactly a 30 second walk from the hotel to the gate. By booking the first time there was almost no one else there when I was. It was great. It was also easy to pick up my tickets the day before at the ticket booth--I've heard if you do that right before your entrance time, lines can be awful and you can miss your entrance.

Have your read the reviews in Trip Advisor:
http://www.tripadvisor.com/Hotel_Review-g187441-d238892-Reviews-Hotel_America-Granada_Granada_Province_Andalusia.html

Christy - did you have the hotel make the reservation for you? Or did you make them yourself? They offered to make them for a charge of 2 Euro per ticket. I would still have to pick it up at the gate, but thought it might be a shorter line?
Also, it was the hotel that recommended the 6 pm time to me. I like the 8:30 idea, that was the reason I wanted to book a hotel on the grounds. I will go ahead with the early time. Steve - yes, thank you , I had read the reviews on Tripadvisor as well as the RS guidebook.

Paula - if you would like a hotel close the Alhambra that is not impersonal, I highly recommend the Carmen de la Alcubilla. We stayed there last March and loved it. It is a very nice B&B with a lovely courtyard that looks over the city. We enjoyed staying near the Alhambra as we had a very early entry time and it was the main reason we were in Granada. It was a nice walk down to the town and it was really lovely to slowly walk back up after dinner.

Hotel America: 1-Star Hotel Like the Alhambra Parador, this hotel is INSIDE the Alhambra walls. Couldn't be better located if you need/want to be close to the Alhambra. Doble Standard Room- from 90 - 130 euros Doble Top Room- from 130- 160 euros Triple Room- from 150- 180 euros Single Room- from 60 - 90 euros Hotel Alhambra Palace: 4-Star Hotel It's not a bad walk to the Alhambra from here - but is, of course, all uphill. Theres a nice big plaza just downhill from here called the Plaza Campo del Príncipe which has a number of bars and restaurants in the Realejo District. I spent 3 nights at this hotel in 2005 and loved the elegance as well as the hillside views of the city of Granada below. Even if you don't stay here, it's worth going for a coffee on their outdoor terrace and gawking through the foyer and seating area. Rooms FROM 105 Euros.
I wouldn't say it's "impersonal" but it is "professional" and luxury. Stuffy? Oh, I don't know. It's probably not so personal like the 1-star Hotel America, but that's only a guess. Saludos, MadridMan/GranadaMan @ you-know-where!

I just booked my own tickets on the Alhambra website. There's nothing to it so I don't see the point of having the hotel doing it.

We stayed at the Alhambra Palace years ago and would not return. In fact, we checked out the next day to stay in a smaller family run hotel that was much friendlier and more of a local feel. It IS impersonal! We arrived at 8:40 after being on the train for 10 hours and after checking in were told that the restaurant was no longer serving food. It was 8:55 and the restaurant closed at 9. We ate olives and other condiments at the bar with our drinks. Our room was the size of a closet that overlooked a huge neon sign and the price was outrageous. I really hate giving bad reviews, as I am a hotel owner myself but, I think you could do better.