Room Service: Hotel Raya Panarea, Panarea, Italy

The smoking cone of Stromboli may have the most ominous reputation of all the Aeolian islands, off the northern tip of Sicily, but Panarea has the ritziest one

The smoking cone of Stromboli may have the most ominous reputation of all the Aeolian islands, off the northern tip of Sicily, but Panarea has the ritziest one. The tiniest of the seven volcanic Mediterranean idylls, Panarea attracts the smartest guests and the sleekest yachts. And with its secluded coves, picturesque port of San Pietro, lack of cars, and spectacular rock formations, it's easy to see why.

Unless you own a bolt-hole on the island, your choice of accommodation is limited to a handful of small hotels. The most sophisticated is the Hotel Raya. Built on a promontory overlooking the village and out to sea, its white, twisting stairways and wide terraces are reminiscent of a Greek villa.

On arrival at the reception desk, you are given your key and a torch, and requested to pile on to a make-shift bench on a tiny three-wheeler truck. You are then taken up the hill to the guestrooms by driver Guiseppe, who displays an alarming nonchalance towards pedestrians. Back down the hill, the reception area, restaurant, bar, and disco – open only in summer – are in the same whitewashed building, with open terraces and panoramic views.

Despite the slightly gratingly loud music played at most times of the day in the restaurant, dinner is a highlight. Not just for the food, but also for the natural spectacle on offer, which few hotels anywhere could rival. As you dine by the light of an oil lamp, you can watch Stromboli erupting in the distant darkness, glowing like the tip of a giant cigar.

Location, location, location

Via San Pietro, Panarea (00 39 090 983 013, www.hotelraya.it). The hotel gazes out to sea towards Stromboli and the crags of Basiluzzo, Dattilo, Lisca Bianca and Bottaro.

Time to international airport: You have to be determined. The closest international airport is Naples, four and a half hours by hydrofoil, €130 (£85) return.

Are you lying comfortably?

The 30 guestrooms are located in a terraced pink-and-white building traditional to these islands. Rooms all have terraces, and are furnished in Indonesian style. These are a five-minute walk down the hill from the village, but there is a tiny bar nearby. Bathrooms are compact, with showers only.

Freebies: The shower gel and shampoo are kept in small pottery bottles, presumably not intended to be removed.

Keeping in touch: All the rooms have direct-dial telephones, but no televisions.

The bottom line

Double rooms from €268 (£180) per night, including breakfast.

I'm not paying that: The Hotel La Piazza (00 39 090 983 154, www.hotelpiazza.it) has doubles from €154 (£102) per night.