Hotel with everyone sharing a standard bedroom: not fun!
Hotel suite type thing with slightly separate area for children, great. Self catering or room service, perfect. And lower standards - for a very long time our definition of holiday was chips and ice cream every day. That kept the smalls happy; we adults enjoyed being together even if it wasn't always wonderfully great quality time.
These days, the routine which eorks best for us is to have lazy mornings self catered - special cereal for smalls who like change, regular cereal for smalls who need routine, posh coffee and treaty breakfast however that looks for grown ups.
Up and out once things start getting hairy, lunch in a cafe or picnic, longish drive after lunch to induce naps in them wot needs 'em.
Tea earlyish for smalls and shot them into bed, adult meal (takeaway, room service, or just nice something if one of us will cook) plus wine for the rest of us.
We usually holiday with good friends who have similar holiday expectations and similar parenting styles. So it's as much about enjoying stretches of time together as it is about anything else.
Mine would struggle with the kind of holidays I loved as a child; they need routine and structure. So we don't do different places every night. And we do usually go back to the same place. So we can build up the nice things to do before we go - even feeding the ducks in a different park can be special.
That said, no 2 year old is going to be deprived forever if they don't go on holiday; if you'd rather save the money for a nicer holiday when they're old enough to remember it, or split it to take solo sanity breaks sans enfant, why not?