Ryokan is a traditional Japanese Inn , that typically features tami matted rooms, onsen and kaiseki, meals (multiple courses and multi dishes of seasonal and regional specialtie) . You will find more traditional ones in rural and onsen towns . Most are in the traditional Japanese buildings but there are more and more modern style buildings providing the full experience.
Rates tend to be more for Ryokan vs Hotel , and rightly so, the experience is so much more. Ryokans will normally privide yakata , slippers/sandals to where around and out and about the premises