Here's my take on the location decision, from my new guidebook to Ambergris Caye, "San Pedro Cool."
WHERE TO STAY: TOWN? NORTH? SOUTH?
Probably the biggest decision you'll make about Ambergris Caye is where to stay. We’re not talking about a specific hotel but about the general area. The area you choose will determine to a great degree the experience you have on the island. You have four basic options:
1) in the town of San Pedro
2) just to the south of San Pedro near the airstrip, within walking distance
3) on the south end, beyond easy walking distance to town
4) on the north end of the island above the channel.
There is no one "best" place to stay. Each of these four areas has advantages and disadvantages. Which area you choose depends on what you want from your vacation. If you're looking for privacy and the feeling of being away from it all, consider the south end or the north end of the island. If you prefer easy access to restaurants, nightlife, shops and other activities, you'll likely be happier in San Pedro town or just to the south. There's little or no advantage to any one area in terms of beaches, although the beaches in town tend to be more crowded with boats than those outside of town.
HEART OF TOWN: Hotels in the town of San Pedro, with a few notable exceptions, are older spots, among them the original tourist hotels on the island. They are, again with a few exceptions, less expensive digs. If you're looking to save a buck or two, this may be the place for you. You also will be right in the heart of things, no more than a few sandy blocks from some of the best restaurants, bars, shops and dive operations on the island. Party animals will want to stay here or just the south of town. Accommodations here include Rubie's, Holiday Hotel, Spindrift, Martha’s, San Pedrano, Mayan Princess, Paradise Hotel and Paradise Villas.
AIRSTRIP SOUTH: If you want a larger variety of moderate and upscale lodging but still want to be within walking distance of the attractions of San Pedro Town, think about staying at the south edge of town and the area just to the south of town. The San Pedro airstrip is here, but you should have few or no problems with airport noise, since the planes are small one- and two-engine prop jobs, and there are no flights after dark. This is a good compromise between the activity of town and the remoteness of the north end and far south end. Among the hotels here are SunBreeze, The Palms, Belizean Reef Suites, Ramon's Village, Steve & Becky’s Cute Little Hotel, Playador, Belize Yacht Club, Changes in Latitudes, Hideaway, Coconuts and Caribbean Villas.
SOUTH BEACH: Although most of this area is beyond a quick walk to town, this a major growth area for tourism on the island. Some of the nicer upmarket hotels are located here, and more are on the way. An increasing number of restaurants and amenities also are located here. Until 1996, the town dump was in this area, but happily it's now been moved farther south. At the far end, you're two to three miles from San Pedro, so for visits to town you'll need to rent a golf cart (US$60 or $65 for 24 hours), ride a bike (some hotels offer them free to guests), take a taxi (about US$5 to town) or take a hotel shuttle, if available. Among the choices here are Xanadu, Villas at Banyan Bay, Tropica, Mata Rocks, Banana Beach, Royal Palm, Victoria House, Caribe Island Resort and Sunset Beach.
NORTH AMBERGRIS: By all accounts, the area north of "the Cut" – a narrow channel of water separating the south and north ends of the island – is where much of Ambergris Caye's growth will occur over the next decade or two. Houses, hotels, and even a restaurant or two are going up here. At present, though, access is limited by the fact that there are only two ways to get to the north end: One is via a tiny, rickety, hand-pulled ferry over the channel, and then via a hike or ride on a narrow path to the various resorts and villas. Bring plenty of bug spray for use when you’re away from the water.
Eventually, when the local political, ecological and financial situations are sorted out, we'll see a bridge put in here and perhaps, eventually, another one coming down from Mexico. We may also see an air strip on North Ambergris. But these events are still years away from fruition. The other current option is via boat or water taxi (US$5 to $10 per person, or more, one way by water taxi, although some hotels provide free shuttles, at least during daylight hours). To get to San Pedro for dinner or a bit of action, you'll need to take a boat, and that can be something of a pain, particularly after you do it three or four times. Accommodations on the north end include Capricorn, El Pescador, Captain Morgan's, Essene Way, Belizean Shores, Journey's End, SunDiver, Los Encantos, Portofino, Avalon (formerly Casa Caribe), Mata Chica, Playa Blanca and Basil Jones Club.
Not on Ambergris but close by, off the back side of the island, is Cayo Espanto and on Caye Chapel, the Caye Chapel Golf Resort.