There are no chain hotels in Avalon, but I think this is one of the best boutique "mom and pop" owned hotels on the island. I don't have low standards, but I've been to Avalon many times and and you're just not going to get the "wow" 5-star treatment anywhere in Avalon, period. You will find the same at most of the restaurants as well. They are catering to tourists. Repeat business is minimal, so there isn't the incentive to go over the top with service. They will probably never see the customer again either way.
We stayed on a Monday night in June 2013 and paid $199/night. We were in Room 213 which is on the main floor just down from the front desk. I was a little concerned that it would be too noisy that close to the front desk but it was fine. It has no ocean view which I knew when I booked it. The view was actually just of the wall next to the hotel with some plants and lattice to spruce it up a little. The room was just as expected - king bed was comfortable, bathroom was clean and the room was tastefully and minimally decorated with a small bistro table and a big flatscreen TV with some cable channels, no mini fridge. Beach towels are available from the front desk. They will hold your luggage if you arrive before the check-in. Overall, the room was comparable to what you might find at any moderately priced hotel chain. Nothing too fancy, but it gets the job done and was just fine for us. They did come in to freshen up the towels and turn down the bed while we were at dinner.
The hotel is on the far end of town (far meaning the side nearer the casino, the opposite end from the main boat landing) and the entrance was about a half block removed from the water front. Some might prefer something more centrally located, but Avalon really isn't that big and I think the location actually makes it a little more quieter than the hotels directly on Crescent Street and the waterfront. Everything in town was within a 5 minute walk. There is a mini-beach and swimming area right in front of the hotel which is quieter and less crowded than the larger beach area next to the green pier.
A staff person directed us to 4 for the ice machine, but on our way we saw the sign said it was on 3. Turns out the one on 3 is broken, but the one on 4 worked. They have a tiny jacuzzi and small deck area on the 4th floor as well. It's a little cramped so I would skip it unless you don't mind being in close quarters with strangers who might join you up there. During check in we were told the hotel offers continental breakfast until 10am, but we slept in and missed it so I can't say if it's any good. But I do think that speaks well of the bed!
Restaurants
Try Antonio's for pizza and Big Olaf's for ice cream. Coney Island West is good for burgers and hot dogs. Also a great coffee shop (looks like it's popular with the locals) at the back of the El Encanto Marketplace (aka "The Landing"). All are within half a block from the hotel. Steve's Steakhouse is great with meals in the $25-30 range and been there awhile, but there were two new upscale restaurants that recently opened that we didn't try - Avalon Grill and Bluewater which were $30 range. CC Gallagher has great coffee and espresso drinks also. Try the Catalina Night or Island Joy.
Activities
Glass bottom boat is good for the price and I would take that over the semi-submarine Nautilus which is 2x the price but not worth the extra cost for a penny pincher like me. Zip line was $120/person and the Segway tours were $75/person. I know people who have done the bus tour of the interior of the island through Catalina Adventure Tours and enjoyed it. We signed up for snorkeling in Lover's Cove for $40/person through the snorkel/scuba shop just across from the basketball courts. The instructor was great and so was the snorkeling.