It really depends on what you want to do....and there is no right or wrong answer.
In general, some of the things you want to decide on is what you want to do yourself.
Pismo Beach is a fun town - bike surreys, pier area to walk out on, a fun melodrama to go to at night, nice beach area. There are some hotels on the cliffs that have nice views as well. Fun town.
Morro Bay - this is not an ocean front town but has an amazing rock in town. Lodging prices are usually a bit lower than in other areas. It has great kayaking possibilities.
San Luis Obispo = This is especially good on Thursday nights where there is a super fun night farmers market; its more like a street fair. If into wine, this is also an excellent place to stay if you want to explore the many Paso Robles wineries.
Cambria - This is a small town with some arts stores. The Moonstone Beach area has good lodging - and easy walk to the beach areas. Its a good location to stay if you want to see Hearst Castle in the morning or want to get an early start up the road to Big Sur area for hiking.
San Simeon - Closest town to Hearst Castle, Hearst castle elephant seals, and the start to Big Sur stretch of the road.
For a two night stand, usually one picks one of the above places to stay based on their own interests. There is no right or wrong answer, so choose the best one for your family.
After that, if you are going to Big Sur stretch, (there is a way not to go through Big Sur if you want to see other parts of California and that is to drive up 101) Big Sur is a beautiful area and if the purpose is to see it it is amazing. It is only 90 miles but it is the type of twisty road, with roads that hug the cliff, that you need to drive it slowly and a minimum 3 to 4 hours needs to be allocated to this area. If you do hiking then you will be spending more time here. Again, its family dependent and there is no right or wrong answer.
After that people pick usually one of the following towns after going through the Big Sur area.
Carmel - this is the closest town on the other side of the Big Sur area. This town is also close to Point Lobos
which is worthwhile seeing. Carmel is great for bed and breakfasts and inn; with several great restaurants.
Pacific Beach - This is near Asilomar Beach area (there is a nice lodge at the Asilomar State Beach there). This is known for butterflys and a beautiful ocean front area (i.e. its equivalent to 17 mile drive without the golf courses.
Monterey - This is a historic town with a historic area to walk through, it has a fun historic cannery and fisherman wharf area with scenic views (such as of sea lions, etc.) It is also where the Monterey aquarium is as well as a place to go on a boat to see whales. It is also a good place to go fishing such as for salmon fishing.
In terms of Carmel, Pacific Beach, Monterey they are all very close to each other so it really is a matter of family interest and type of lodging you want to stay at.
Marina - Marina is just north of Monterey. It has a nice beach area there but can be windy at times. Its also where there are some lower priced inns and motels to stay at (however since its now got some trendy resorts there as well) prices are going higher there as well. It is also closer to the Elkhorn Slough Expedition than Carmel/Monterey/Pacific Beach area.
Santa Cruz - Santa Cruz is a great surfing capital area - if you want to see surfers this is a good place to go.
The Santa Cruz Boardwalk (historic amusement area) is here and many families like to spend the night here to enjoy the park. Admission to the boardwalk is free, but you do need to pay for the rides you want to take. There is sand volleyball here as well. The nearby city of Capitola has a very nice river facing restaurant called Shadowbrook. there is a Joie Di Vivre Hotel with great ocean view of the surfers, and there is a mixture of motels and lodging close by the boardwalk area.
Half Moon Bay - Half Moon Bay has a Ritz Carlton - nice golf course, wedding spot, bagpipes play at night. There is also more casual dining and lodging in town. Fishing expeditions including rock fishing go out from the harbor area. During the fall, it is a great place to stay for their harvest festival and pumpkin farms. It is close to Hurley Goat Farm - they also make goat cheese. It is also close to Ano Nuevo that is an elephant sel and bird place - interesting to visit if interested in animals.
There is so much along the coast. Yes, you can drive it in a day or two or if you want to experience it a lot of fun things to do
You might want to see the California State Parks also as there is so many fun state parks along the coast.
From another post I see you're traveling with your family. In which case I would suggest Pismo Beach over Cambria as a stopping point. Cambria is a lovely little town (where the pines meet the Pacific) but perhaps more couples oriented. Pismo, OTOH, is great for kids.
Thank you that was very helpful!!!
Hmmm, not sure I would include a visit to Channel Islands National Park on a drive up the coast.... you'd get rather wet in attempting that drive.....
Good places to stay on a two night drive are Pismo Beach and Monterey.
Good places to visit and stop for a bit include Santa Barbara, Solvang in the SB wine country, The Madonna Inn in San Luis Obispo (men & boys only in the men's restroom please!) and then on in to Pismo.
North of Pismo, Cayucos is a nice small down with a little downtown by the pier. A good place to gets drinks and a snack maybe. Here are some of the Top Questions about the drive.
Even if you're staying in one of the adjacent or nearby cities, Cayucos (Hoppe's Garden Bistro) and Pacific Grove (Passionfish) are home to two of our all-time favorite restaurants and would be excellent choices for a memorable meal.
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