While Hilo has a couple of large 300-room hotels, both on Banyan Drive, they're not luxurious resorts (stick to Kona and South Kohala for those). Instead, Hilo's best accommodations comprise indie B&Bs, inns and hostels. Besides cost, think about location when choosing where to stay: unless you stay close to downtown, you'll probably need to drive to get anywhere.
Many proprietors have a two-night (or more) minimum stay or charge extra for one night's lodging. Also, kids aren't always welcome, so inquire before booking.