Where to Stay in Palau: The Best Areas and Hotels for Every Budget

If you're planning a trip to the beautiful country Palau, choosing where to stay is a little different from choosing accommodation in most countries because Palau is made up of hundreds of small islands.

There are beautiful resorts on quieter islands and peninsulas just outside the centre, jungle resorts where you feel completely surrounded by nature, beachfront properties and even accommodation on other islands if you want to get further away from the main tourist hub.

The important thing is understanding the different areas before you book. A hotel that looks close to Koror on a map can feel quite different from staying downtown, and if you're planning to spend your days diving or taking boat trips, the location of your hotel can make a huge difference.

This guide covers the best areas to stay in Palau, what each area is like, who I think it’s best for and my favourite hotels in each area.

Quick Answer: What Is the Best Place to stay in Palau?

For most first-time visitors, Koror is the best place to stay in Palau. It's the most convenient base for tours, diving, restaurants, supermarkets and getting around. You don't need to spend your entire trip there, but if you're visiting Palau for the first time and want to explore as much as possible, staying somewhere in or around Koror makes life considerably easier.

If you're looking for a resort holiday rather than convenience, however, I'd look at Ngerkebesang Island. And if you're looking for a quieter, more remote experience, you can head further north onto Babeldaob.

If you’re short on time or don’t want to read the full article, I would take a look at the three hotels below. I don’t think you can wrong with any of them.

Palau Royal Resort

This is one of the best-known resorts in Palau and sits directly on the waterfront in Malakal. It has an outdoor swimming pool, restaurants, bars, spa facilities and beach access, making it a much more resort-like experience than staying downtown. I stayed here and loved it!

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Palau Pacific Resort & Villas

If you're looking for the classic luxury Palau experience, this is the hotel I'd look at first. The hotel sits on the coast of Koror State and has its own 250-metre white-sand beach and is surrounded by tropical gardens and forest. You can choose between villas and beautiful overwater bungalows.

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Palau Central Hotel

If you want a comfortable hotel in the middle of Koror without paying resort prices, this is a great pick. It’s walking distance to lots of restaurants and shops and offers modern rooms, a swimming pool, gym and spa. If you’re staying for a long time they also offer rooms with kitchens.

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Downtown Koror – The Budget Friendly Choice

If you're visiting Palau on a budget, Downtown Koror is the easiest choice. Koror is the largest city and commercial centre of Palau, and this is where you'll find the biggest concentration of restaurants, shops, supermarkets, dive centres, tour operators and hotels.

Don't expect a huge city. Koror is small and relaxed, and much of the island is tropical greenery rather than buildings. The advantage of staying centrally is simply convenience. You can walk to restaurants and shops, arrange tours from your hotel and easily get picked up for diving and boat trips.

This is particularly useful because you'll probably spend most of your days out exploring the water anyway. Rather than paying for a luxury resort purely for somewhere to sleep, you can put more of your budget towards diving, snorkelling and boat trips. However, if you want a nice spot to relax by the beach and a spot that feels more luxurious, I would look elsewhere.

Best hotels in Downtown Koror

Palau Central Hotel

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Palasia Hotel

This is one of the more established full-service hotels in Koror. It has an outdoor swimming pool, sauna, spa and restaurant. It's a good option if you want more facilities than a basic downtown hotel but don't necessarily want to stay at a full beach resort.

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Palau Hotel

This is a great option if you want to stay right in the centre of Koror. The hotel dates back to 1982 and is Palau's first downtown hotel. It’s centrally located close to the waterfront and shopping centre. It's not a secluded tropical resort, so only choose this if you want practicality over luxury.

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Malakal Island – Best for diving and being close to the water

Malakal Island is connected to Koror by a causeway, so staying here doesn't mean you're isolated from town. Instead, you get a slightly more waterfront and resort-oriented environment while remaining close to Koror.

Malakal is home to the main harbour and is particularly convenient for people who are visiting Palau primarily for diving and boat trips. There are also several waterfront restaurants and places where you can sit by the water in the evening. This is the area I based myself in and I thought it was a really nice area to stay in.

Best hotels in Malakal

Palau Royal Resort

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Sea Passion Hotel

Sea Passion Hotel is particularly interesting if you're visiting Palau for diving because it has an outdoor pool and its own dive centre, iPalau Dive Center. It also offers kayaking in the nearby bay and marine excursions through its tour operation.

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Cove Resort Palau

This is a great hotel located on Malakal. It has views towards the Rock Islands and marina, a large lagoon-style swimming pool, restaurant and other resort facilities. Breakfast is also included with the room which is always a big plus.

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Ngerkebesang Island – best for luxury and beautiful surroundings

If your idea of Palau involves waking up somewhere surrounded by tropical vegetation, looking across the lagoon and spending your evenings at the resort, you should look at Ngerkebesang Island.

The island is part of Koror State but feels much more removed from downtown and it’s where you'll find some of Palau's most attractive luxury accommodation. The trade-off is obvious: you're further from restaurants and shops, so you'll rely more on hotel restaurants, taxis or resort transportation. For a special occasion or honeymoon, though, I think this is one of the best areas to stay.

Best hotels in Ngerkebesang

Palau Pacific Resort & Villas

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Palau Carolines Resort

It's located up in the hills of Ngerkebesang and consists of private bungalows surrounded by tropical vegetation. From the bungalows, you get views across the Rock Islands and lagoon. You don’t have beach access, but stunning views in a peaceful area of Palau.

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Palau Mangrove Hotel

This hotel is set in a peaceful mangrove setting in Koror, and combines contemporary rooms with a tropical atmosphere and is a convenient base for exploring Palau’s famous islands, lagoons and dive sites. It’s a good choice if you want somewhere relaxed and comfortable without paying luxury-resort prices.

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Babeldaob – best for nature and waterfalls

If you're looking at a map of Palau, you'll quickly notice that Babeldaob island is enormous compared to Koror. This is Palau's largest island and it’s much more rural and undeveloped. If your idea of Palau is hiking through jungle, visiting waterfalls, exploring traditional villages and getting away from the main tourism hub, this is where you should spend some time.

The downside is that you're much further away from the main diving and boat-trip infrastructure around Koror. So I wouldn't necessarily recommend staying here for your entire first trip unless your priority is land-based exploration.

But adding two or three nights can make sense if you’re in Palau for a longer time. There aren’t many hotels on Babeldaob island yet, but if you want to stay here check out the Palau Sunrise Seaview Landison Retreat.

Palau Sunrise Seaview Landison Retreat

This is a boutique property where you can choose between mountain-view rooms, ocean-view accommodation, suites and private villas. The property has an infinity pool, wellness facilities, restaurants and a rooftop bar. It’s a great choice if you want space, quiet and nature.

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How many nights should you stay in Palau?

I'd recommend at least 5 nights because there is so much to do here and I can almost guarantee that when you’re first here, you don’t want to leave again.

You can technically see most of Palau in three or four days, but that feels too rushed to me, particularly because most of the best experiences involve boat trips, hiking, flying and diving or snorkelling.

If you have a longer trip, you can consider splitting your time rather than staying in one hotel for the entire visit. That way you can combine a beachfront stay with one of the jungle retreats.

The most important thing is not to choose your hotel based purely on the room. Think about where you want to spend your days.

If you're going diving every morning, a beautiful resort 30 minutes from the harbour may not be worth the extra time and money. If you're visiting Palau for a once-in-a-lifetime tropical escape, on the other hand, spending a few nights somewhere like Palau Pacific Resort could be exactly what you want.

Palau is small enough that you can explore a lot from one base, but choosing the right area will make the whole trip easier, and when you're travelling this far for those incredible Rock Islands, you want to spend your time enjoying them rather than sitting in a car getting from one side of the island to another.

Plan Your Trip to Palau

Hopefully this guide has given you everything you need to plan where to stay in Palau. To make planning the rest of your trip even easier, I've included all the resources I personally use when I travel.

Find the best hotels and compare prices on Booking.com

Find the best hotels and compare prices on Hotels.com

Book buses, trains and ferries with 12Go

Brows the best tours on Viator here

Brows the best tours on Get Your Guide here

Compare eSIM plans with Airalo here

Get travel insurance from SafetyWing here

Every recommendation is based on tools and services I genuinely use and would recommend to friends and family.

By using these links you help me continue to create free travel guides like this one.

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If you have any questions about travel in Palau, or just want to follow along as I travel the world full time, don‘t hesitate to reach out to me on social media.

I would love to connect and help out!

-Ingrid