Forget Capri, this tiny island is Italy's best-kept secret

Flanked by the glittering waters of the Tyrrhenian Sea, Panarea is a part of the volcanic island chain perched off the northern tip of Sicily. The second smallest of the eight Aeolians, Panarea is the most fashionable – if not the most famous – alongside larger siblings Lipari and Salina. Picture a petite island just three kilometres long, where traditional white limestone homes are linked by winding pedestrian only streets and layers of brightly coloured bougainvillea. Only 280 permanent residents call Panarea home, but the temporary population surges year-round, especially in summer when visitors (including an ever-present number of celebrities and the lavish jet set) descend on the turquoise waters and surprising number of bars and eateries tucked around the small port and laneways. Here’s our guide to where to eat, drink and stay when holidaying in Panarea.

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