Transportation in Hokkaido

We�fre a group of 8 persons from Hong Kong, we�fll visit Hokkaido in June/July. We�fll land at Sapporo, spend one day in Otaru and go to Hakodate for a few days; then return to Sapporo . My questions are:
1. Is it more convenient and cheaper to buy a JR Hokkaido Rail Pass?
2. The Hokkaido Rail Pass will take us from Sapporo to Hakodate and return, and from Sapporo to Otaru and return; does the Pass includes travelling inside Sapporo and Hakodate by train & by bus?
Many thanks.

JR Hokkaido Rail Pass would not cover transportation within Sapporo or Hakodate as there are few on no JR stations in those locations. Hakodate is quite small and a day ticket for the street car would probably take care of transport in that town.

You don't say if you are staying in Utaru overnight. But anyway, you would need the 4 day flexible pass. Day one to get from the airport to Utaru. Day 2 to get from Utaru to Hakodate. Day 3 to get from Hakodate to Sapporo and the final day to get from Sapporo to the airport. Single fares would come to somewhere over 20,500+ Yen against 19,500 Yen for the flexible pass.

Many thanks for your response. Our plan is:
Day 1 - from New Chitose Airport to Sapporo. Day 2 - from Sapporo to Otaru and return to Sapporo same day. Day 3 - from Sapporo to Hakodate. Day 6 - from Hakodate to Sapporo. Day 8 - from Sapporo to New Chitose Airport.
(1) Does the ticket you suggested fit our plan? (2) What other tickets we have to buy to travel within Sapporo & Hakodate?
Thanks again.

Without reserved seats, the total JR fares would be 19,480 Yen or 21,100 With reservations to/from the airport and to/from Hakodate. Reservations on the Airport train can be useful if you have a lot of luggage, there is more room for it and you have a chance of a seat. Although some trains to and from Otaru have reserved seating (on the Airport train for an extra 300 Yen) it is not really needed and would restrict the number of trains you could use.

If you wanted to use the JR Hokkaido Rail Pass, the only one you could use would be the 4 day flexible. I would suggest you use it to get to/from the airport and to/from Hakodate with reserved seating. So you would save 1,600 Yen. Then just pay the 620 Yen unreserved each way to Otaru.

As for transportation within Sapporo, it depends on where you plan to go and on what days. Check out this page for options:

http://www.japan-guide.com/e/e5306.html

As for Hakodate, as I said previously, the one day pass for the Hakodate streetcar (600 Yen) should be good enough for getting around, more info here:

http://www.japan-guide.com/e/e5355.html

I don't think the combined bus/streetcar ticket would be good value. Again, it really depends on where you plan to visit. You might find that a lot could be covered on foot if you are staying near the train station (fish market, wharfs, etc).