Hotels are sometimes great - no doubt about it. There's the luxury of leaving for the day and coming back to a magically clean room, primarily. BUT, what about when you are traveling with your kids, or other family members? Now you need two rooms, and it get expensive. Not having a kitchen means all meals are eaten in restaurants - which means not only are you spending lots of money, you aren't able to take advantage of the farmers markets, seafood stands, etc to create your own meals (I love to cook).
Therefore, we typically go first to VRBO or Someway to search for our destination, and here are more reasons why:
We enjoy meeting the owners and getting their guidance on restaurants and activities
There is room to move around!
We enjoy having access to a kitchen to make coffee and breakfast
Free wireless! I get so annoyed when hotels tack on $18/day for internet!
Privacy - you don't have to hear doors slamming all night as can happen in a hotel
You have the comforts of home - sofas, TV's, kitchen, and whatever amenities your host offers.
What we look for when choosing a vacation rental:
Positive reviews - if they don't have any reviews, we pass. Why take the risk?
Are you talking to the owners or their assistant, or a management company? We prefer working with the people who really have a stake in the place
Do they communicate in a prompt and friendly way?
Are they easy to deal with in terms of making payments?
Do they charge a cleaning fee or is it included?
Are the pictures available that really show you the space?
If they are out of town, will they leave us contact info for a backup person?
Last summer we stayed at two wonderful vacation rentals - one in Bellingham, WA (between Seattle and Vancouver), one in Vancouver, and one on Orcas Island. I highly recommend these three because they were all in great locations, were run in a friendly and professional way, and were SO helpful in helping us choose our activities.