The Balcon de Europa is in a lovely location close to the old town, which is full of Spanish character. The hotel is set into the cliff overlooking the Mediterranean. The hotel is privately owned and the staff clearly take pride in it. It is smart and clean. The breakfasts are excellent, and the half-board option is very good value (the food is good but don't expect gourmet standard; there is waiter service most nights). There is live entertainment some nights. Our only criticism of the meals is that the wine was the same as could be bought in the local shops at a third of the price. Alternatively there are lots of good restaurants close by.
The beaches on this part of the Costa del Sol are fine gravel, and there were obvious waves and currents when we were there, and the hotel pool is quite small, so it is not an ideal spot for small children. But Nerja's authentic Spanish feel, and the accessibility of the mountains (which seem to be swarmimg with wild goats - try for example the area around the Fuente del Esparto, reached by the track which starts at the entrance to the Caves) make it perfect for anyone who doesn't want to sit around all holiday.More