Well, in India there is very small difference between the two. We call it a Hotel where we take food. It is not at all wrong saying that "I am eating now in a hotel" or "Let's have a coffee in the hotel".
But actually when we say Hotel it points to a place where we stays where we are away for any vacations or any business meetings and when we say a Restaurant it is completely a place where we can only take food. No way we can take a full night rest in a restaurant. A hotel can have a restaurant or more than one restaurant within it.
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A hotel is a place which may consist of restaurant and it also consists of sleeping facility whereas a restaurant doesn't. A restaurant is a place where you only eat food.... In some places such as Nepal And India there is hardly any difference in both of them as Nepal and India uses restaurants as hotels and hotels as restaurants... I know this as I lived there for 11 years...