The first priority for anyone is getting a roof over your head, and you can if push comes to shove find accommodation at the pier when you arrive off one of the many ferries. You shouldn't do this at peak times, because you might end up on the beach, or paying a lot more than you wanted to.
In terms of costings, you will find the following to be roughly correct as of early 2007.
400 Baht will get you a room right on the beach, for two people, per night, and for this you'll get a fan, and a hole in the floor!!
If you want better, which means things like A/C and perhaps a fridge, you could pay up to 1200 Baht.
You could stay at Sairee beach, which is where the nightlife and action is, but be prepared to be disturbed by noise if you go to bed much before dawn!!
If you are a part animal, but like to sleep as well, then you can stay near Mae Haad beach, which is only five minutes walk away.
Chalok beach is quiet, and very nice too, but it will cost you around 50 Baht for a taxi to get to where the action is, but don't hire a motor bike, because most of the injuries occur on bikes with drunk tourists in the dark, and negotiate your taxi fare before the journey.
In terms of food, then obviously there is a huge amount of Thai food available, it's not expensive at all, and the seafood is great, and in abundance.
A lot of the fish is barbecued, and you can pay from 25 Baht for a simple breakfast through to 400 Baht for a decent meal out.
Barbecue fish is one of the local favourites.
Try the Thipimarn restaurant on the north of the island, it is a cut above some other restaurants, and it has the most wonderful view of the sunset.
When you want an evening in the bars, then check out a dive shop, and they will tell you where the action is that evening Please don't go swimming after drinking, it is one of the main causes of death amongst visitors to Koh Tao.
Also remember that one of the diving safety tips you will read is avoiding dehydration, and that is exactly what over indulgence in alcohol causes.
Safety is a key issue on Koh Tao, so remember the advice on alcohol, and swimming after drinking, and finally be careful of the taxi drivers, they can turn nasty, so agree a price before boarding, and finally don't hire, drive, or go as a passenger on a motorbike, especially in the dark.
Finally remember to pick up the free tourist magazine Ko Tao Info, which will give you what you need to know
Over the last six weeks we've enjoyed great diving conditions on the islands, pinnacles and wrecks around Koh Tao. Visibility has been in the 20 - 30 metres range, plus seas have been mostly flat. But even better - we've had an enormous number of whale shark sightings throughout this period!
Most of the sightings have been of whale sharks up to 5 - 6 metres in length, i.e. juvenile specimins, frequently seen around the more isolated sites such as the Chumphon Pinnacles, Southwest Pinnacles and Sail Rock.
Two days ago DJL Instructor Matt Notte was completing dives three & four of an Open Water Course an got to enjoy a whale shark at the Chumphon Pinnacles. This one was approximatly 4 metres long and stuck around our divers for a long time! Imagine if we could promise a whale shark sighting with every course!
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