The festival is at Pimlico, right?
If that's true, then you have 2 best bets, and they're both 10 miles from the venue:
1. Any hotel in the Inner Harbor. They're all good, and in a good location for tourists. When my family visits, they usually stay at a holiday inn by the convention center. It's cheap for the area.
2. Towson is a college town and a Baltimore Suburb. Great nightlife; hotels are probably a little cheaper. Search for the one on Dulaney Valley Rd - I think it's a Sheraton, but I'm not sure.
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