The area is wonderful and it makes a stay in any hotel so much better, you can spend a month in Lake Toya and it won't be enough. Now, about the hotel, it is very dated. They keep it fairly clean, although bathrooms are so old, they can't be cleaned any better. The room is huge we had Japanese style that's good for 4 tatami mats. The onsen is even more dated and worn out, yet for all of you Japanese bath lovers, it's an onsen with a small outside and big inside bath, the sauna is super hot. The breakfast was very unexciting, small selection and nothing was fresh, probably the worst breakfast we had during 10 days in Japan. The staff is nice like most Japanese, but very limited English.
I would most likely stay somewhere else, they have dozens of hotels in this area, but only a few listed on Hotels.com.