Cappadocia does not have a hotel district. It has six or seven villages scattered across about fifteen kilometres of eroded tuff, each with its own cave hotels, its own character and its own relationship to the thing most people came for, which is a sky full of balloons at first light. The choice between them is usually presented as a matter of taste: lively or quiet, central or scenic. It is more useful to treat it as a question of money running in an unfamiliar direction.
In most destinations, paying more moves you towards the centre. Here it moves you out of it. The cheapest beds in the region sit in Goreme, which is also the village the balloons launch over, the village with the minibus station, and the only one you can live in for three days without arranging a single car. Every step up the price ladder takes you somewhere quieter, higher or more finished, and further from all of that. This is not an argument against spending money. It is an argument for knowing what the money buys, because in Cappadocia it is rarely a better cave.
The geography, in one paragraph. Goreme sits in a bowl at the centre, ringed by the valleys. Uchisar is four or five kilometres west on the highest ground in the region, crowned by a castle rock visible from almost everywhere. Cavusin is a short way north of Goreme on the Avanos road. Ortahisar is a similar distance southeast, below a castle of its own. Urgup, the largest, is roughly ten kilometres east and behaves like a working town rather than a village. Avanos lies further north on the Kizilirmak, pottery country, and is the one most first visits can skip. Balloon operators launch mainly over the valleys immediately around Goreme and Cavusin, which is why the whole map bends around the least peaceful option on it.
The cheap end is already decided
Below roughly EUR 40 a night, the decision makes itself: you stay in Goreme, because almost nowhere else has stock at that price. The other villages went boutique a decade ago and did not keep a budget tier. Goreme did, and it sits in cave houses rather than in concrete blocks, which is the unusual part.
Dorm beds run somewhere around EUR 15 to 25 in the spring and autumn peaks and drop noticeably from November through March, when the region empties out. ShoeString Cave House, built out of five restored cave dwellings with a rooftop pool, and Center Cave Hostel are the long-standing options; Rustic Caves, Local Cave House and Diadem Cappadocia Guest House cover the small-guesthouse bracket just above, where a private cave room with breakfast is often still well under three figures.
What this money is actually buying is not the room. It is the absence of a car. The minibus station sits in the middle of the village, the Goreme Open Air Museum is a walk of about a kilometre and a half uphill, the valley trailheads begin where the houses stop, and the restaurants are all within a few hundred metres of each other. Nothing in the next two price brackets can match that, and travellers who go up a tier and then spend twenty minutes each evening arranging a taxi have effectively paid twice.
The one real choice inside Goreme is vertical. The village climbs a set of steep cobbled hills, and the hotels on top of them, particularly around Aydinli, look out over the valleys where the balloons inflate; the flat centre is cheaper, louder and looks at other buildings. If you are at this end of the market and the balloons are the reason you came, take the height over the fittings. You will carry your bag up a slope to get it, and there is no lift in a cave.
One thing not to pay extra for here: the word cave. In Goreme nearly everything is one. A premium charged for rock walls alone is a premium charged for the local geology.