Depends where in town you want to be. The main hotel area is well east of the centre and personally I prefer to be closer to town. You might try the Zegyo Hotel (I've stayed in the bungalows on the roof!) or the Pacific Hotel which is the other side of the railway station. As it's name suggests the Zegyo is opposite the Zegyo (market)
A little more expensive, and it's a new place where I have not stayed, is the Mandalay City Hotel. Not quite as central as the Zegyo Hotel.
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