How about a hostel with a 5 star view?
Thousands of years before backpackers created the Hippie Trail, Indigenous Australians used to go to the area now known as New South Wales. Life on the road has moved up a notch since prospectors, shearers and stockman travelled with swags (sleeping bags). YHA Australia operates 33 hostels across Sydney and regional NSW and have single rooms with private bathrooms, so you don't have to share if you don't want to. The YHA on Sydney Harbour is one of the very, very best hostels – and I mean AWARD-WINNING. The YHA on Sydney Harbour also has a huge roof-top deck that will rival any five-star hotel's view.
Good location, price and staff
The Travelodge Wynyard is located very conveniently to the harbor. They are close to a supermarket, transport and other conveniences. Travelodge Wynyard is a reasonably priced hotel. They have a small Café and Internet access. Great friendly service too.
Vibe Hotel Sydney is centrally located and near the fringe villages of Surry Hills, Darlinghurst, Chinatown and our Sydney entertainment precinct offering live theatre and music year round. Run around all day and return to take a dip in the heated roof-top pool.
Planning to stay for a while?
Mantra2 on Bond Street is a great choice if you're staying a little longer. Rooms feature a fully equipped kitchen and they have laundry! Room choices include one and two bedrooms and even penthouse suites. A recent refurb has done this property proud.
There are a million options. Be sure to poll your friends who have actually spent some time there. Remember everything is very close together and they've got great transportation options, so a hotel across the Harbour is not a bad location and it might be more price friendly.
What to do while you're there
The Legendary Surfing Safari - Surfing is part of the culture and not just a fad of the 20th century. It's actually a culture that is thousands of years old but the last 100 to 200 years has been when the surfing culture became recognized and popular. If you want to surf in the most epic location, then you have to surf the east coast. With more than 807 miles of coastline dotted with sandy shores, New South Wales is basically one long clean break, the state is tailor-made for surfing safaris.
Where to travel
Go North
Maybe you want to head up to Byron Bay for the Bluesfest? Travellers Auto Barn is a 'one stop shop' for travelers planning a self-drive trip up the coast. Travelers can buy or rent vehicles that are a combination van/sleep/kitchen/lounge. They have a full range of campervans, campers, wagons, station wagons or cars to choose from. Camping or Glamping (glamorous camping) is very popular in Australia.
There is a significant train service too. It's a fun 2 hr trip out to the Blue Mountains (Katoomba Station). Go bush walking, climbing or abseiling for a bit of adrenalin in nature, maybe spend the night and then snooze on the train on the way home to Sydney. Check out the 3Explorers hotel there or other locally flavored accommodation.
Go South
A local favorite is Ulladulla (say Uh-la, Dull-la), only a 3 hr drive south of Sydney. Local university students usually arrange a shared house and log some serious beach time here. Ulladulla is close to several national parks. Morton National Park, to the west, is home to Pigeon House Mountain, a local landmark which is a popular climb. Murramarang National Park, between Ulladulla and Batemans Bay, has beautiful coastal walks, beaches and camping sites.
Bet you've never been Whale-watching like this! The south coast of NSW is one of the best regions to spot the Humpback Whales from May to November. Watch from the shore at the Cape St. George Lighthouse in Jervis Bay National Park or from the cliffs at Point Perpendicular Lighthouse off Beecroft Peninsula. Or just jump on a boat! Maybe you'll see the legendary white humpback Migaloo that appears nearly every year.
Check out the Killer Whale museum overlooking the Pacific Ocean in Eden or learn about the whaling history of this maritime community. If you time it right you may be there for the Eden Whale Festival.