"Chan e taigh-òsta a th' ann."
Translation:It is not a hotel.
It's funny how you don't notice things you hear every day. I have never noticed it, but that is the way many people (most in my experience) say it. I suppose the e is slenderizing the n, as if it were *cha ne. I always pronounce chan eil, chan i and chan e that way, but I can't think of any others. I don't even do it to chan iad. It's a bit like 's e where the e slenderizes the s, so it is just pronounced *se.
If you are not sure about this 'slenderization', n would normally acquire this 'kind of y sound' that you describe when the nearest vowel in the same word is an e or an i, but the point here is that the 'in the same word' bit seems to have been forgotten.
Note that if you are wondering where you would hear chan i and chan iad, they are pretty rare in colloquial modern Gaelic, but they do exist.
I agree. There is no need to argue which is more common. The simple fact that there are significant number of people that say it should be an is reason enough that they should accept it. There are people upset on all seven questions where a hotel is mentioned.
On this question I show how common the two forms are and discuss the history of the word. But someone needs to flag it if it is to be changed.