Hotels in Hokkaido

Hi,

I'm travelling to Hokkaido on free and easy but I understand it's quite difficult to get around without a guide becos the Hokkaido is really huge. Is there any local tours available where I can sign up when I reach Hokkaido?

And which hotel is nice and at reasonable rate in Hokkaido? Pls advise. Thanks so much!

I understand it's quite difficult to get around without a guide becos the Hokkaido is really huge.

I don't think so. Here are some resources to plan a trip in Hokkaido:
http://www.japan-guide.com/list/e1101.html

Is there any local tours available where I can sign up when I reach Hokkaido?

One of the very few travel operators that I know has some offers for foreigners is Chuo Bus:
http://www.chuo-bus.co.jp/

Sunrise Tours has also added some Hokkaido tours recently:
http://www.japanican.com/

And which hotel is nice and at reasonable rate in Hokkaido?

Which area of Hokkaido?

My itinerary in Hokkaido is as follows:

1st Day: Otaru
2nd Day: Asahikawa (Soubkyo Ropeway)
3rd Day: Hakodate (Onuma Quasi National Park), Lake Toya, Jigokudani 'Hell Valley'
4th Day: Sapporo

Can you suggest a hotel that is in a convenient location where I can travel to these places easily or is it more advisable to change hotels according to my itinerary?

How do you plan to make your approach ?
If you were coming in from the south I would say stop at Hakodate on the way in then go on to Sapporo. Otaru and Asahikawa are both quick trips from Sapporo ( 30' and 80') whereas Hakodate is 3 hours.
Lots of hotels in Sapporo and Hakodate. What is the budget ?

You will be spending about 4-5 hours on board of trains and buses on day 2 and about 6-7 hours on day 3.

If you have to cover so many places in such a short time frame, I recommend the following route, if possible:

Enter Hokkaido through Asahikawa Airport, see Sounkyo, see Sapporo and nearby Otaru, see Noboribetsu on your way to Hakodate, see Hakodate and leave Hokkaido through Hakodate Airport.