Nobody arrives in Cappadocia and books a hotel. They book a village, and the village decides the holiday. Get it right and the balloons come up over your own parapet while the kettle is still boiling. Get it wrong and you spend four mornings driving in the dark to look at somebody else's sunrise.
The ten-minute geography that settles the argument
Cappadocia is not a town, and it is not one province either: the historic region spreads across Nevşehir, Aksaray, Niğde, Kayseri and Kırşehir. The handful of settlements travellers actually use, though, sit together in Nevşehir province, inside a triangle small enough to drive around before lunch. Göreme is in the middle of it. Uçhisar is roughly four kilometres west and a good deal higher. Ürgüp lies under ten kilometres east; published figures run from about six to eight, depending on whether you are measuring the road or the map. Avanos is about ten kilometres north, on the Kızılırmak. Ortahisar and Çavuşin fill the gaps, and Mustafapaşa sits a few kilometres south of Ürgüp.
Because nothing is far from anything, first-timers assume the choice of base is cosmetic. It is not, and the reason is the balloons. They lift at first light from fields on the Göreme and Çavuşin side of the plateau and drift with whatever breeze there is, which is usually not much. Sleep in Göreme or Çavuşin and the whole thing happens above your roof terrace while you are still in a dressing gown. Sleep along the Uçhisar ridge and you are on the western rim of the same bowl, high enough to be level with the baskets and looking across at them rather than up. Sleep in Ürgüp, Mustafapaşa or Avanos and you get a handsome middle-distance version, or you set an alarm and drive to a viewpoint in the cold. None of those is wrong. They are simply different holidays, and the difference is the easiest thing to overlook on a map where every village looks adjacent to the next.
One more thing before you commit. The dolmuş, the shared minibuses, run between Nevşehir, Göreme, Uçhisar, Avanos, Çavuşin, Ürgüp and Ortahisar through the day in season, typically every 30 to 60 minutes, with Göreme's otogar as the hub. That is genuinely useful for reaching a trailhead in the middle of the morning. It is generally no help before dawn, which is when this region's day actually starts, so check the current times locally and assume a taxi or a hotel shuttle for anything at first light.
Göreme: inside the picture, and the noise that comes with it
Göreme holds a large share of the region's cave hotels, along with the bus station, the tour desks, the laundries and the bars. It is also the base you can walk out of and be in the landscape quickly, provided you are honest about which walk. Zemi Valley genuinely begins at the village margin. Pigeon Valley, the Güvercinlik, is the path that links Göreme with Uçhisar and can be picked up on the edge of town. Rose Valley (Güllüdere) and Red Valley (Kızılçukur) are not doorstep walks, whatever the hotel map says: their usual entrances lie a few kilometres out, off the Çavuşin road to the north or from the panorama viewpoint on the Ortahisar and Ürgüp side. Reckon on the better part of an hour on foot simply to reach the start, or take a minibus or a taxi to the trailhead and walk back. The Göreme Open-Air Museum is about a kilometre uphill from the centre, mostly on tarmac and mostly against traffic.
For a first visit without a car, this is the sensible choice, and we would take it. You are inside the balloon corridor, everything is reachable on foot or by minibus, and if a tour is cancelled you can walk to three other desks and rebook in twenty minutes.
The price is atmosphere. Göreme is a working tourism village, not a preserved one. Quad-bike tours here are sold mostly as sunrise and sunset runs, so the engine noise tends to arrive during exactly the two hours you wanted the terrace for. Hotel shuttles start collecting balloon passengers from around half past four, engines idling in narrow lanes. Building work is more or less permanent. And the celebrated terraces, the ones that furnish half the region's photographs, fill up well before dawn; some hotels now keep them for guests only, others sell access, and either way the serenity of the pictures is a technical achievement rather than an experience.
If you choose Göreme, choose height. The terraced slopes above the centre put you over the roofline for balloon views and above the worst of the street noise; the long-running Kelebek Special Cave Hotel is the obvious reference point on that ridge, and smaller family-run houses sit along the same slopes for less. Rooms down on the valley road are cheaper for a reason.