Nikko Ryokan

I highly recommend the Hotori An. I'm a tour guide and have been to nikko about 30 times at it is the best place for the price. Lovely onsen, great views, great people running it. If you get the chance go for a 30 minute walk to the Ganman ga fuchi (turn right out of the front door and follow the path by the river). It's very peaceful and allthe 'jizo' which line the way are awesome. For dinner go to see Miki in the high street 'Miki's Hipari restaurant'. Everyone goes there but the foot is awesome and she is quite a character.

It is an awesome place to stay !!!

You have a coin laundry, nice rooms, a great social / breakfast room and you can make the hot tub private. Plus it is located near all the shrines. It is a long, long walk from the train station so with your luggage it would be a bear. You can walk there without your stuff no problem.

BTW if you go into the tourist office they will give you a free guide to doing hikes around Nikko.

That's great, thanks!

The Annex is nicer and in a more pleasant and tranquil setting than the main Turtle "Inn" located a couple hundred yards closer to the center of town, so be sure to get the Annex...but the optional dinner meal (which is very good, requires advance notice you want it) is served at the main inn...and the main inn is just a bit more convenient to town...and like someone else suggested, both are a long walk from the train stations - I recommend taking a cab, even if you have the Nikko Pass that entitles you to bus service, because the bus will drop you off several hundred yards from the 2 Turtle Inns, and I found the walking map the Turtle Inn provided was very hard to figure out how to walk to the inn - part of the directions take you through a parking lot of a large hotel, and this was just not evident or intuitive looking at the map (this would especially be a problem if you arrive after dark)...cab ride from the train station was around 1000 yen, I think...

If you need somewhere cheaper I stayed at Nikko Minshyuku Rindou-no-ie and it was nice and friendly and the (optional) food was decent. It is semi-near to the station.