There are no luxury hotels at Niagara Falls (or Niagara-on-the-Lake for that matter). Or even decent ones, the accomodation there ranges from poor to moderate. So get a room with a view of the Falls and make the best of a bad situation. If you want anything approaching luxury try a Bed & Breakfast on the Canadian side. Or stay in Toronto (which has cheap luxury hotels now, thanks to SARS) and drive down for the day.