Located in the charming and quieter town of Anacapri (15 minute taxi from Grand Marina), a much more authentic experience on an Italian island with fantastic restaurants and bars, cafes and local shops all on the same street as the hotel. The only drawback was that the hotel's pool hours are 10-6pm, which is usually the time you arent at the hotel. La Zagara is a michelin guide restaurant next door and is in a lemon tree setting, beautiful and pricey. The Capri Palace hotel is a 10 minute walk and has some amazing restaurants and bars, ritzy and very pretty. Luigi at the front desk was very helpful, arranged a private boat tour for us and had a number of good suggestions. If you are travelling with the kids there is a nice kids park directly in front of the hotel, and the town is very kid friendly. Capri town is a 10 minute taxi ride away and it has all the fancy shopping one would desire.
Extras: the hotel has a nice breakfast and a small but popular wine bar.
All in all, I am glad with our choice of hotel and would recommend it to my friends.