I got a recommendation for Hotel Platino, located close to the heart of Santiago on Estrella Sadhala Avenue. Rooms start around US $35 dollars per night with an average room rate of US $77 dollars. They can be reached at 1-809-724-7576 As always, guest policies vary. So call ahead to inquire.
There is a gay club in Santiago. It's fairly new so I haven't heard much about it. The Krash Vogue Club House is located on Avenida 27 de Febrero in front of Banco Santo Cruz.A nice way to sample the city may be to take an overnight excursion. The Caribe Tours bus from Santo Domingo to Santiago is about US $8 dollars. 1-809-221-4422
While there you could check out the Carnaval Mask Museum and the local falls and beaches.