We are staying in Alayor at the Hotel IBB Aquarium the first night - about 12 km from the airport and it's $75 CAD for the night including breakfast. Reviews seem ok. Then we're going to Barcelona but when we come back we're staying at the Hotel Mediterrani for $72/night CAD including breakfast.
Links:
http://www.expedia.ca/pub/agent.dll?...4637131&from=i
http://www.expedia.ca/pub/agent.dll?...6162807&from=i