Walk down the stairs and turn left, where you will find a thug sitting in his chair in his room. Kill him before he retrives his Shotgun from his closet, then collect the Sawed-Off Shotgun from underneath his bed. Continue to walk down the hall and you'll find another thug watching TV. Kill him, and two more thugs will appear from the door ahead. Kill them as well. Now go into the bathroom and you'll find a few painkillers, as well as a V-Head Junkie. V-Head's can "go off without warning" but if you leave him alone, you should be fine. However, the wisest thing to do is simply shoot him because he may go insane and start shooting at you.
Now go through the large brown door and kill the other two thugs with your shotgun then continue down the hall until you reach the locked door. Break the badlock with your Lead Pipe and walk through until you reach another hallway. Here, you'll find two thugs joking about killer cola machines and will have their backs turned. Chuck a grenade at them or shoot them and wait for the two other thugs to show up. Shoot them both with your shotgun and walk over to the TV. A cutscene will activate with the news anchor declaring Max as being armed and dangerous, while Max nervously glares at the screen. Go into the next room and collect the ammo from the closet, ignoring the thug who OD'd on Valkyr. Continue to walk down the hall until you reach a doorway and walk through it.
You will gain further access to Lupino's hotel.