The parcel in question is rectangular, with Neches & Red River being the shorter sides and E. 9th and (an alley?) being the longer sides, so maybe the rooms would be facing E. 9th or the alley? The motor court entrance is on the (shorter) Neches side, and I don't know what the shorter side facing Red River will look like. But at least the lot doesn't run the full length of Red River in that block.
I found the documents from the Planning Commission
It says the applicant is proposing a mixed-use hotel with retail/commercial on the ground floor and the hotel rooms on top, so with the retail/commercial it seems like there will at least be some interaction with the street.
As far as it being a budget hotel, the document notes that it's in the Waller Creek District and one of the goals in that district is to "encourage new development that promotes the area as a diverse, liveable, and affordable mixed-use district with a distinctly local feel."
Well, they got the affordable part down, and hopefully they'll do something that will give it the distinctly local feel. It may not be ideally what some of us would have liked to see, but it might not end up being as bad as what some of us are thinking.
And at least it will generate more tax revenue and look a helluva lot better than the existing parking garage, and the bed taxes it generates will help fund the Convention Center.