A good and cheap hotel in Penang to recommend is the Hotel Mingood. You pay about $20 for a double room in this budget hotel which is well situated within walking distance of lots of Penang's sightseeing, restaurants and markets. Reason why it's a cheap hotel is because the rooms are old. Nevertheless it comes with airco and a TV that can receive BBC.
Penang's beaches are nice, not as exotic nor idyllic as other beaches in Malaysia. Main reason why you should go to Malaysia is because not only received Penang a world heritage status, it is especially a food paradise. Reason is because Penang has a rich multicultural history with Chinese, Malay, Indian, and European influences. And Penang won't be spoiled by the country's biggest political party which has no interest in making Penang the pearl of the orient.
Always check out the cheap hotel packages of the budget airlines traveling to Penang. We already mentioned that Malaysia's budget airline AirAsia gives attractive packages for a cheap hotel stay in Penang's Shangri La Rasa Sayang's beach resort: