Stayed at the Mercy Hotel for 4 nights, kicking off a honeymoon. The hotel was very nice with everything you might want or need. It was also located in a great neighbourhood, just on the eastern edge of Bairro Alto, although you'd never know while at the hotel (at least on the side we were on away from the street). A quick walk across the street takes you into a busy and fun neighbourhood with something for everyone from hip restaurants to take-out bars and holes in the wall (not a typo). In my opinion a much better option than staying in the busier "downtown". Plus it starts you on the top of a hill rather than the bottom (although you'll still walk up more than one in Lisbon).
You just can't say enough about the staff, everyone was just so very friendly and keen to help. Ricardo and Ronnie and everyone else we spoke to at the hotel were always helpful and always smiling. The rooms were modern, clean and comfortable (special mention to the curtains/drapes that led to the first 11 hour sleep I've had in years).
ps. the mannequins are still there, quirky for sure, but there are only a few in the lobby and none on the floor we were on. Didn't seem to bother us as much as others have mentioned. We only had to kick them out of bed once.More