Check out the "hotel deals" forum (part of mileagerun) where we're discussing a great Melia sale offering rooms for 45 euros/night.

You'll have to take 2 rooms, but it may be better than any other alternative.

The lack of "family rooms" is always an irritant when planning a family vacation in Europe. Europeans seem to take their families on week long holidays in vacation rentals, so I guess there's not much of a market for family hotel rooms. The Accor chain is rolling out a line of Suite Hotels that accomodate 4, but there are none yet in Spain.

What I usually wind up doing is seaching for small inns and b&bs at my destinations that will accomodate a family. You can google your city and "family room" to help find them. It is a tedious process, however, and you miss out on a lot of the more desirable places to stay. I've always thought a website devoted to family hotel rooms in Europe would be a useful addition to the web.