Short answer: pick by what you want most — convenience to the Temple and lake, riverfront calm, hilltop views, boutique character, or lowest price. Below are practical, “worth-the-price” picks (by budget and style) plus where to stay in Kandy and quick booking tips.

Where to stay (neighborhoods, quick reasons)

• Lake / Temple area (Dalada Veediya): best if you want to be inside Kandy’s sightseeing loop — you can walk to the Temple of the Tooth, markets and lakeside restaurants. Good for first-time visitors and Perahera access. (chcplc.com)
• Riverside / Peradeniya side (Mahaweli River): quieter, scenic river views and easy access to the Royal Botanic Gardens. Good mid-range value. (cinnamonhotels.com)
• Hantana / hill slopes outside town: pick this for peaceful hill/mountain views and boutique hotels — better for couples or anyone who wants quiet and views rather than being in the city center. (theva.lk)
• Around the train station / Dharmaraja Mawatha: most budget hostels and backpacker vibes; very practical if you’re catching trains to Ella/Colombo. (hostelz.com)

Hotel picks that tend to give good value

• Cinnamon Citadel Kandy — best mid-range riverfront value. Modern, reliable chain hotel perched above the Mahaweli River with river-view rooms, pool and easy access to Kandy sights without city noise. Good balance of comfort, service and price for most travelers. (cinnamonhotels.com)
• Earl’s Regency (or Earl’s Regent) — best for full-service comfort that often rates well on price vs facilities. Large property with pool, spa and mountain views; frequently available at competitive rates for a 4–5★ experience. Good if you want resort comfort and space. (booking.com)
• The Kandy House — best boutique splurge for heritage/romance. A restored manor with very personalized service and a quiet country feel (about a short drive from the city). Worth it if you want a stylish, intimate stay and don’t need to be inside the city center. (thetimes.co.uk)
• Theva Residency (Hantana hills) — best for views and calm without sacrificing facilities. Hilltop rooms, good vistas over Kandy, popular with couples who want quieter, scenic stays; pricey compared with town guesthouses but a strong value for the views and setting. (theva.lk)
• Mahaweli Reach — good riverfront heritage option. Classic/colonial-style hotel on the Mahaweli; mixed recent reviews but often good value for location and character (check recent reviews for current condition). (mahaweli.com)
• Queen’s Hotel (Kandy) — best budget/heritage-central pick if you want historic, walkable location opposite the Temple. Simple, central and convenient (you’ll pay more for location than for luxury). (chcplc.com)
• Budget / hostels (backpackers & low cost): Funk Bunks / White Rose / Eden Kandy / Bunkalow and similar hostels give excellent value and are often right by the lake or train station — dorm or cheap private rooms from just a few dollars/night. Great if your priority is price and meeting other travelers. (hostelz.com)

How to choose quickly

• First-timer, 1–2 nights, want convenience: stay by the Lake/Temple (Queen’s Hotel or a lakeside mid-range hotel). (chcplc.com)
• Want quiet, views and a slightly more luxurious stay: pick Hantana hill boutique (Theva) or Kandy House (if you want an intimate manor). (theva.lk)
• Want river ambience with reliable facilities & pool: Cinnamon Citadel or Mahaweli Reach. (cinnamonhotels.com)
• On a tight budget / backpacking: choose a hostel near Dharmaraja Mawatha / train station (many great options). (hostelz.com)

Booking tips (worth the price)

• Book Perahera season early: If you’ll be in Kandy for the Esala Perahera (usually July–August, exact dates vary year to year) book months ahead — central hotels sell out and rates spike. (Perahera is one of Kandy’s busiest periods.) (chcplc.com)
• Best time to find lower hotel rates: shoulder months and book ~1 month out for the cheapest hotel rates, according to booking-site trends. For last-minute deals you can sometimes find reductions, but for Perahera/peak you must reserve early. (expedia.com)
• Check recent guest reviews before booking: some older heritage hotels have variable maintenance — reviews from the last 3–6 months will show whether the property currently meets expectations (especially for Mahaweli Reach and some older properties). (expedia.com)

Quick recommendation (one-line):

• If value + convenience = Cinnamon Citadel (riverfront mid-range) or Queen’s Hotel (central); if you want boutique/romantic and don’t mind being a short drive from the center = The Kandy House or Theva Residency; if budget = choose one of the well-rated hostels by the lake/train station. (cinnamonhotels.com)

If you tell me your travel dates, budget per night, and whether you want to be inside the city or in the hills I can shortlist 3–5 specific rooms with approximate prices and links to compare current availability.