Well, what I know, Hotel California was a state mental hospital in Camarillo, California. It closed down in 1997. I visited it a few times while going to college for required visits in psychology classes. There were all sorts of mental illness sections from the criminally insane to kids and adults with autism. There were always crazy stories about that place. In 2002, the California State University system took control and opened it back up as a state college, California State University Channel Islands. Many of the original buildings are still there used for classrooms. Stories from students and faculty say it is haunted. They have built new buildings as well and housing for faculty and students.
The meaning of the words have never been cleared up by the Eagles. But, as I mentioned, many thought the place was always haunted. There is claim the Eagles or one of the band members while staying there (for an unknown reason) had these hauntings going on. If you look at the cover of the 1976 Hotel California album and the skyline of the Cal State Channel Islands campus, the similarity is undeniable. It's possible that the site did inspire the Eagles, but concerns over retaining the "Hotel California" trademark led their lawyers to recommend to the band members that they deny the mental hospital as the inspiration for the song. That's why the members say it wasn't the mental hospital. But, it was.