Hi Simon,
I stayed at Tryp Peninsula in Varadero a couple of years back. It has excellent rooms, good facilities and it's own stretch of beach which is easily accessable. It's only let down by the standard of food served in it's buffet. This seems to be the case in Cuba as a whole, they don't have the levels of culinary service that you would expect in the rest of the Caribbean.
The only other hotel I would recommend in the area is the Paradisus Varadero, from the brief look we got, it looked to be well setup.
Make sure you allow for time in Havana, it's a fascinating place and seems to grip most people with it's culture - It's well worth visiting while the Mr Castro is still alive......
