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Hotels are generally clustered around the main tourist spots, with the more expensive ones generally occupying the prime positions. Those in The Rocks and around Circular Quay are just a short stroll from the Sydney Opera House, the Harbour Bridge, the Royal Botanic Gardens, the ferry terminals, and the train station, and are close to the main shopping areas.

Hotels around Darling Harbour offer good access to the local facilities, including museums, the Sydney Aquarium, the Star City Casino, the IMAX Theatre, and Sega World. Most Darling Harbour hotels are a 10-minute walk, or a short monorail or light rail ride, from Town Hall and the central shopping district in and around the AMP Centerpoint Tower and the Pitt Street Mall.

More hotels are grouped around Kings Cross, Sydney's red-light district. While some of the hotels found here are among the city's best, in this area you'll also find a range of cheaper lodgings, including several backpacker hostels. Kings Cross can be unnerving at any time, but especially so on Friday and Saturday nights when the area's strip joints and nightclubs are doing their best business. Staying here does have its advantages, though: you get a real inner-city feel and it's close to some excellent restaurants and cafes located around the Kings Cross/Darlinghurst and Oxford Street areas.

If you want to stay near the beach, check out the options in Manly and Bondi, though you should consider their distance from the city center and the lack of City Rail trains to these areas. A taxi to Manly from the city will cost around A$30 (U.S.$21), and to Bondi around A$20 (U.S.$14).

Always ask about discounts rates, package deals, and any other special offerings when booking a hotel, especially if you are traveling in winter when hotels are less likely to be full. Ask about weekend discounts, corporate rates, and family plans. Serviced apartments are also well worth considering, because you can save a bundle by cooking your own meals; many also have free laundry facilities.

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