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Where to stay in Santorini boils down to deciding whether you want to be on the beach or overlooking the caldera. The towns on the western side of the island are set on the caldera cliff overlooking the volcano, while the towns on the eastern side of the island offer direct access to beautiful beaches.

In general, the caldera towns are more stylish and upscale, and are littered with some of Santorini’s best boutique hotels, as well as posh clubs and fine-dining restaurants. The beach towns, in contrast, are more low-key, youthful and budget-friendly.

Set on the cliffs midway along the island’s west coast, Fira is Santorini’s largest town and its capital. It is the beating heart of tourism on the island and features trendy bars, eclectic shops, glamorous restaurants, a clutch of Santorini’s luxury hotels and of course, eye-popping views over the caldera. Fira is bustling, exciting and the best base on the island for those who want to be at the heart of the action.

If you have a quieter, lazier holiday in mind, consider staying in Firostefani. Although it’s only a 10-minute walk away from central Fira, the atmosphere in Firostefani is noticeably more tranquil. And while hotels along the caldera are almost universally pricey, it’s often possible to snag somewhat more affordable deals in Firostefani.

Oia is the swankiest village in Santorini, and offers spectacular sunset vistas to the north and views of the caldera to the south. More sophisticated and less crowded than Fira, Oia is a favourite with honeymooners. It’s home to some of the best five-star hotels in Santorini, including several distinctive cave hotels, which are carved into the caldera cliff. Expect high-end art galleries, upmarket boutiques and superb restaurants, but little in the way of nightlife.

Set at the highest point of the caldera’s rim, the town of Imerovigli has some of the best views in Santorini. The vibe here is fairly laid back and the sunset views are just as stunning as those you’ll see in Oia, but minus the crowds.

With red and black sand beaches set against a dramatic backdrop of cliffs and headlands, laid-back, inviting Kamari is the most popular beach town in Santorini. There are plenty of restaurants, bars and shops to browse, along with a great mix of Santorini’s luxury hotels and more budget-friendly options.

The nearby town of Perissa is one of Santorini’s best destinations for travellers watching their bank balance. Home to 7 kilometres (4 miles) of striking black-sand beach, this small town is a hotspot for nightlife as well as water sports such as jet skiing and windsurfing. The Profitis Ilias mountain, found just north of town, is crisscrossed by some wonderful hiking trails.

Akrotiri is the perfect base for visitors to Santorini looking to swerve the crowds. This sleepy hamlet is home to Ancient Akrotiri, the ruins of a 16th-century BC village preserved beneath layers of volcanic lava. Akrotiri also has a stunning red-sand beach that is backed by matching red cliffs and lined with cheerful tavernas.