I care about hard product functionality far more than design. However, soft product comes first for me. I see the existence of well-executed hard product functionality as a result of the care and attention from the soft product. If a hotel has put great thought into designing everything around their guests, then for me they are already a huge step ahead in providing great service and a great experience overall.
I do prefer a hotel whose hard product provides a strong sense of place, but I will gladly forgo that for a functional room at a hotel with excellent service.