We have stayed at the Cotford Hotel twice now and have found it very good. It is about 2.3km or 1.5 miles from the factory. It is not the lowest cost place in town but if you want to spoil yourself their restaurant is fantastic.
I followed Gambalungas recommendation (earlier post, thanks) and stayed at The Cotford Hotel during last weeks factory tour (more info and pictures to come - a great experience!!). It was a nice hotel that fulfilled all expectations (Mrs M3W was very happy to be in "the Bishops room" with impressive furnitures http://www.cotfordhotel.co.uk/index.php?page=2
). Hotel is situated in within walking distance to the factory (15 mins), town centre (5 mins) and the Malvern Hills (10 mins, yes we "climbed" both peaks). Well, if a guy living in Italy recommend the food...then you know it is world class. The Nags Head is also just down the road if you prefer a more genuine pub/food.
By the way, I had a very nice beer at the hotel, think it was called Wire Pedal...please enlight me if you know the right name.