The Solace hotel is a recommendable standard tourist / business hotel close to the center of Puerto Varas. I had a junior suite which was quite spacious with a nice view over the city. The rooms were functional and well equipped, the bathroom as well. Breakfast also was o.k., in a large room not too charming, which was also used as restaurant in the evening.
One word of caution for those who can not walk well: the hotel is on top of a small hill - not too far down to the city, maybe 5-7 minutes walk, but quite steep, which may cause problems for some.