Banos, a town of about 12,000, is about four hours by car from Quito. The spa and the waterfall were right across the street from the hotel Sangay. The hotel itself was very nice. The main restaurant at the hotel was international with local favorites and was very good. Also there was an internet room and a pool. The owner had some good Tungurahua eruption stories too.
Unique Quality: My wife and I both got a spinal (espalda) massage and it was priceless. We both thought the wonderful lady had broken our necks they popped so loud at the end. No pain, only a huge relief.
We only stayed one night in the Hotel Sangay and it served it's purpose. The rooms were clean and the shower was hot (and after 6 straight days without heated water it seemed like heaven).
We had a view of the waterfall which sounds impressive but isn't and the breakfast wasn't great but I believe it's included in the price. I don't recommend the "coffee."
The hotel is set outside the town center but it's easy to walk right in. I was a little nervous about walking back from the bars at night though.
It's a basic hotel and for the price (about $20 p/p) and location I would recommend it. But when you hear "best hotel in Banos" don't expect a 5 star.
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Address: Plaza Ayora 101, Banos, Ecuador