Downtown Monterey near the wharf is the Hotel Pacific. Nice rooms, all with fireplaces. It's AAA 4-diamond and you can often get a pretty good rate with either Entertainment Card or AAA. Our favorite restaurant in Monterey is Montrio which is near the hotel. It was rated one of the best new restaurants in the country a couple of years ago in Esquire. Drive out to Big Sur (30-45 minutes) and eat at either Ventana or Nepenthe. Sprectacular views, spectacular drive.