Similar to other places in Alaska, you will have a hard time finding a cheap place to stay in Valdez. The Totem Inn has a great location, particularly if you'll be going fishing or taking a glacier cruise, as it is within walking distance from the docks. You won't have difficulty finding it as the business "hub" of the town is all located downtown, near the docks. The Totem Inn is definitely not the Ritz, and is probably more comparable to a Super 8 than even a Best Western. We paid $119/night (this is the Alaskan resident rate) for our motel room, and while it certainly wouldn't be worth that much down in the lower 48, we thought it was fine for our purposes.
A real plus to the Totem Inn is that they have several types of accommodations available including deluxe suites (with full kitchens), cabins, and your average motel room. During our stay, our friends stayed in one of the cabins (photos attached), while we stayed in one of the motel rooms. The cabins seemed a little older than the motel room we stayed in, but it did include a kitchen. Our friends brought their own dishes, cookware, and utensils, but apparently, for $10 extra, you can rent these items from the Totem. Our motel room came with a small refrigerator, a TV with VCR/DVD player, and a microwave (in addition to the typical items you find in a motel room). There was also a coin operated laundromat located downstairs in our building. We found our room to be clean and comfortable.
The Totem Inn also has a decent restaurant on-site and one of the better gift shops in town. All things considered, we enjoyed our stay there and wouldn't hesitate to go back again.