Sandro Rossi has gradually transformed his simple guesthouse, a one-time haven for students and backpackers, into a smart little hotel with pretty honey-coloured damask walls and striped curtains and small but comfortable bedrooms, all done up in the same Venetian vein with attractive repro furniture, tiled floors and marble bathrooms. All 30 rooms have now been renovated, and all have ensuite bathrooms and seasonal air-conditioning.   Most of the bedrooms are off long corridors, up flights of marble stairs from the first-floor reception. There is no lift, but a porter is on duty from 7am to 8pm. Formerly classified as a one-star, the hotel now boasts three, but prices are still fairly modest for the San Marco location. Some rooms have attractive canal views; in high season rooms with views are the same price as those without views, though in low season they are more expensive.From the little old-fashioned apricot and green breakfast room beyond the reception, Signor Rossi assures us that in summer you can hear the gondolieri serenades. The focal point of the room is a gleaming copper and brass espresso machine. On the ground floor, in bustling Calle dei Fabbri, the well known restaurant Le Bistrot de Venise serves antique as well as traditional dishes. It's usefully open until 12.30 am and offers hotel guests a 10 per cent discount.