Posada Vagamundos is a great choice for a stay in Tarifa. You can relax with a drink at the bar/lounge, and the coffee shop/café is the perfect spot to grab a bite to eat. Other highlights include a terrace, and rooms offer balconies and free WiFi.
Pros: Excellent location in a wonderful town! Tarifa was my favorite town in all of Costa Del Sol. This is an adorable small hotel in the heart of all the bars and restaurants. A quick walk will find you at the beach too. I don't believe there was air conditioning but since the town is coastal this didn't seem to be a problem. There is no elevator so be prepared to tote your luggage up the stairs.