The 36-room La Vecchia Fonte Hotel is a mid-range property with a convenient location facing the harbor in the small town of Palau. Though there's little to do on-site, plenty of restaurants, bars, and sea activities can be found nearby. Quality antique furnishings throughout give the hotel an Old-World elegance, and rooms are outfitted with charming decor, flat-screen TVs, minibars, and tea- and coffee-making facilities. Drawbacks, however, are the lack of a swimming pool, gym, and small balconies in most of the rooms. There's also no lunch or dinner service, but the dining room serves a free breakfast spread and cocktails. Travelers may want to check out the Hotel Palau, which has a pool, massage services, and dinner menu, but it's father from the water.

The three-pearl Hotel Palau is a well-positioned but dated hotel in the town of Palau, a 20-minute walk from the harbor and beach, or a short ride on the hotel's free daily shuttle bus. Although the lobby and shared areas are in need of a revamp, the 97 rooms are bright, and decorated with charmingly traditional Sardinian furnishings. A large outdoor pool is set in a sunny terrace, plus there are a spa offering massage and wellness treatments and a small gym. The on-site restaurant serves a free buffet breakfast and a la carte dinner, and seating is available on a sea-view terrace. Guests looking to stay closer to the center of town might want to try the similarly priced La Vecchia Fonte Hotel.