Look, this is a quirky, funky sort of place. A tiny hotel. A mom-and-pop operation (run by husband and wife on premises). Decorated in a very tacky manner - but its very tackiness makes it endearing. And the rooms are tiny and the furniture is old.
All that said, I have stayed here about 4 different times on various trips to Palo Alto and would gladly do so again.
The first 3 reasons are: location, location, location. The California Ave neighborhood of Palo Alto (sort of a "mini-downtown") is just wonderful - with a great array of cafes and restaurants and other nice and useful service establishments. And it's just down the road from Palo Alto's distinctive "Town and Country Shopping Center." And a short drive from Stanford.
But more than that, I like the quirkiness of this hotel. I like the fact that it's a mom-and-pop operation. I like the little courtyard. I like the smells from the bakery on the ground floor. I love the cats (the owners have cats and if you want to befriend them, you can).
And the price is right!!!
Oh, I almost forgot to mention one of the best parts -- every Sunday morning there's the California Ave Farmers Market, which features a cornucopia of delicious, fresh, and healthy food. If you stay at the Hotel California on a weekend, you can practically roll out of bed to this gustatory delight!