There's only a very slight difference, if any. Using the verb "sein" may be a little bit colloquial, since it has a very broad meaning. "Liegen", however, bears reference of a static, spatial meaning, often used in a geographic context:
"Paris liegt in Frankreich"
sounds better than
"Paris ist in Frankreich".
But you can use "liegen" in this sense only for static facts, especially not regarding human individuals.
"Mein Kollege Erich liegt gerade in Frankreich"
would sound somewhat weird, maybe bearing the connotation "he isn't working very hard there, lounging in the sun all the time".
Regarding a hotel, "liegen" is completely okay, especially in written language. A native speaker would probably prefer "sein" in everyday language when describing the way to the hotel (as in your example).
However, he will prefer "liegen" if he wants to describe its ambience and environment: "Das Hotel liegt mitten in der Altstadt, umgeben von Palmen". Using "sein" in this context would be a stylistic inconsistency in my opinion.