Like much of Vietnam, hotels in Danang tend towards the functional. In Danang, there are basically two areas to choose from: the city and the beach. A location in the city is handy for walking around to see the sights, shops and restaurants, while a beach location has the beach, of course. The beach is a good 15 minutes from the city by car, so you'll need transportation if you stay at the beach but still want to see the sights.
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Danang City Hotels
The best area to stay in the city is on or near the river, so my three top choices below are all close to the riverside.
Bac My An / China Beach Resorts
All of these resorts are on the long stretch of beach about a 15 to 20 minute drive from the center of Danang.