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I suggest everyone should stay at the Grand Palace Hotel, but for those on a budget there are plenty of guesthouses as this is the port for Ko Tao a popular island for diving. Final option would be to stay with the family at the bottom of the hill only paying them what you think (approximately 100b per night).
Chumphon Grand Palace
Area Chumphon town
Telephone 077 547 800/12
Price PN Baht 800
GPS .
Distance from hill 30 minutes
The rooms are spacious & clean. Good value for money.