Hotel La Palma, Oetker Hotels

Tucked within Capri town's pedestrian lanes above the famous Piazzetta, Hotel La Palma holds the distinction of being the island's oldest hotel, originally opened in 1822. The building's terrace restaurant looks south over terracotta rooftops toward the Tyrrhenian Sea.

Oetker Collection's restoration preserved the original Mediterranean garden while adding a pool and updated guest rooms with hand-painted tilework. The property is reachable on foot from the funicular terminus in under three minutes — no vehicle access necessary.

Capri town sits at the island's northern edge; the Blue Grotto requires a boat from Marina Grande below, roughly thirty minutes each way. August weekends fill the Piazzetta by 21:00; the hotel's upper garden remains an effective escape from street-level crowds.