I think that you generally get what you pay for, and at this, Smile Hotel Otaru more than meets the expectation. It has a splendid location (just 3-5 minutes away from Otaru Station), a friendly receptionist/check in staff, and a spacious communal lobby - free drinks and coffee are provided, although we didn’t know how to use the coffee machine and didn’t bother asking for help.
The room which I was in has a pretty comfortable bed and space. Toilet, though, is tiny and feels cramped. The thing that could be further improved on is the cleanliness of the room - we found nooks and crannies filled with dust - it seemed like places that are not immediately visible are skipped in the cleaning process.