Most of the must-visit and popular tourist attractions are in Mahabaleshwar or closer to Mahabaleshwar than Panchgani. Few sights like Mapro, Velocity Park, Strawberry farm are on Mahabaleshwar Panchgani road.
If you have your own vehicle, you can stay away from city center (Mahabaleshwar Market). But if you don't have your own vehicle, it makes more sense to stay close to city center.
As most of the sights are in Mahabaleshwar, Mahabaleshwar is more crowded. Generally, there is possiblity of heavy traffic during evening time. Sunset point, Venna lake and Shivaji chowk in Panchgani are the places where you observe traffic jams. But it does not mean you should prefer Panchgani to Mahabaleshwar as you still need to go to Mahabaleshwar to visit the sights.
If you are staying for say 5 day trip or more, you will visit less number of sights per day and cut the traffic during rush hours. In which case you can consider staying in Panchgani.
This is obivious question for any trip. Your budget will decide the hotel you will stay. But in Mahabaleshwar there are no areas which are more expensive than others. Hotels rates are not dependent on areas.
Mahabaleshwar or Mahabaleshwar-Panchgani road are the best areas to stay in Mahabaleshwar simply because most of the tourist attractions are in this area.
Mahabaleshwar Market area is city center. Area has ST stand, many restaurants and market for shopping. Obiviously you can imagine that this place is very convinient for tourists. If you don't have your own vehicle, you should stay in this area.
Pros:
Cons:
Panchgani has few good hotels mainly because tourist attractions
in Panchgani are fewer in number than in Mahabaleshwar.
One problem you may face sometimes is that of traffic. If you
start from Mahabaleshwar to your Panchgani hotel in the evening,
you might get stuck in traffic at 2 places, one at Venna lake and
one at Shivaji Chowk (Panchgani). It may take 1 hour to travel 25
km and you might fell exhausted on a trip, you want to relax.
I would still recommend staying in Panchgani as one can find
few good hotels. However, preferred stay would still be at
Mahabaleshwar or Mahabaleshwar-Panchgani road.
Mahabaleshwar-Panchgani has many good hotels and I hope by now you have decided
which area to stay in Mahabaleshwar.
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