For those thinking staying in Capri is too expensive, here's a budget hotel with a view. We've been staying at the Belsito for a number of years and each year gets better! Just make sure and ask for a room upstairs at the front of the building facing the "street."
The hotel is a good walk from the popular piazetta, the "living room of the world" with its incredible people-watching. But this 10 minute walk, uphill all the way, takes you away from any noise and dreaded tourists who all depart the island in the early afternoon. It is on the way to the Villa Jovis and not far from the Faraliogni, the spectacular rock formations off Capri.
Unique Quality: Each room has a semi-private balcony overlooking all of Capri. Sunsets and sunrises are beyond belief. Accommodations are not deluxe but who cares? There's nothing like buying some cheese and crackers and wine and sitting on your own balcony.
There's a tiny "supermarket" nearby for the booze and snacks. Also the food is delicious at the Belsito. (After 20 years of touring Capri, I've only had two or so bad meals anywhere there!)
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Address: Via Matermania 11, Capri, 80073, Italy