First, should you stay at all?
Honestly, most people should not. Izamal is a half-day town, and the natural move is to sleep in Mérida or Valladolid and visit as a stop on the way. But there is a real case for one night: the yellow streets are best at dawn and dusk, empty of the day crowd and lit gold by low sun, and only an overnight guest sees that. If you are chasing those photographs or you simply want to slow down, one night earns its place. More than one and you will run out of town. Here is where to base if you do stay.
Around the convent and main squares
This is the heart of it and where you want to be. A handful of small hotels and guesthouses sit within a block or two of the convent atrium and the two squares, Parque Itzamná and Parque 5 de Mayo (Zamná), so you step straight out into the ochre streets and can reach the Kinich Kakmó pyramid on foot in a few minutes. This is the zone for first-timers, couples, and anyone here for the atmosphere and the light. Lodging runs to colonial-style guesthouses and a couple of atmospheric mid-range hotels set in the yellow buildings themselves, not resorts; Hotel Rinconada del Convento and Posada Flory are the kind of thing you find right on the center. Rough nightly ranges: roughly 700 to 1,600 MXN for a decent double, more for the nicest colonial rooms (approximate, and higher in the Nov-Mar high season). Landmark to picture: anything within sight of the convent’s arcaded facade.
A few blocks out
Cheaper guesthouses, family-run posadas, and a scattering of budget rooms sit in the residential rings just beyond the center, out toward the pyramid and the municipal market. You trade the immediate plaza views for a lower rate and a quieter, more local street, and it is a flat five-to-ten-minute walk back to the convent. Good for budget travelers and backpackers who do not mind the walk. Rough range: roughly 400 to 800 MXN for a simple double or a private room in a posada (approximate). Landmark: the numbered streets between Parque Itzamná and the Kinich Kakmó entrance off Calle 27.
Families and a quieter base
Families do well right on the center for the short walking distances and the calesa rides, but the town also has a few larger, plainer hotels with parking and simple pools on the approach roads toward the Mérida–Valladolid highway. These suit anyone driving with kids who wants an easy in-and-out and a place to cool off, at the cost of charm. If you want genuine quiet and space, the outer edge of town delivers it, though you will be walking or driving in for everything.
What is not here
There is no nightlife scene to base near, no beach, and no cluster of design-forward boutique hotels the way Valladolid has around Calzada de los Frailes. If you want bars, restaurants with range, and choice after dark, that is Mérida, about an hour and a half west, and you should sleep there and treat Izamal as a day stop. For cenote country and a slower base, the sibling town of Homún is another option to the south.
What a friend here would tell you: pick a place right on the center or do not bother sleeping in Izamal at all. The entire payoff of an overnight is walking out your door into the yellow at first light, before the buses arrive. Anything a car ride away defeats the point.