Ah okay,so they can enjoy a little luxury within reason :)So here are some very nice options for you to look at.I have deliberately avoided the obvious chain hotels-Swiss,Hilton,Radisson. etc and given you some smaller,elegant choices which reflect some ... 'Turkish-ness',some character, in them.....
Georges Hotel Galata,close to everything and great views too.
Has Han Galata close to the above.
Adahan Hotel,close to the above.
Corinne Art Boutique Hotel,close to the central part of Istiklal.
Stories Hotel Kumbaracı,near to the above.
10 Karaköy Morgans Original Hotel,almost on the Bosphorus water front.
Hettie Hotel,slap bang on the water front.Pay the extra for sea view rooms,it is worth every cent!
Nidya Galata Hotel ,close to the above.
Hotel Villa Zurich in über cool Cihangir,a few minutes walk from Istiklal.
Pera Tulip close to the metro stop at Şishane,the funicular at Tünel and Istiklal Avenue.
Perhaps as a group you may like an apartment so 1312 Galata would be a nice choice if so.No bar but close to many and you could also have a drink on your own terrace :)
Another lovely suites option is Witt Istanbul Suites, close to everything.
So that gives you a few options to look at but if nothing grabs you or they are full then let me know and I'll suggest some more.