The smallest of the Aeolians, Panarea is an island paradise of whitewashed walls dripping with Mediterranean flora, and a coastline dotted with preposterously gorgeous cerulean coves. The fauna, however, may be an acquired taste: It's a popular haunt for the figli di papà (rich kids) and Peter Pans from Italy's bigger cities who overrun it in July and August, flush with Daddy's money. Petite Panarea is chic, and it definitely isn't cheap. Book your stay in advance, especially in high season. Prices in late May, June, or September are much more bearable, and you'll have the island almost to yourself. No cars are on the island's narrow whitewashed-walled streets, just golf carts, smoking scooters, and the ubiquitous three-wheeled ape mini-trucks.
Resist the temptation to visit Panarea as a day trip from another island; when the boats offload day-trippers in high season, the island is swamped and loses its sleepy Mediterranean charm. If you're going to "do" Panarea, you should stay at least 1 night. During the day, avoid the throng and hire a boat to putter around the gorgeous coves: Cooling off in the crystalline waters, having a floating picnic as you bob around, is the way to enjoy Panarea. As the sun goes down, and the last boats have whisked away the day-visit hordes, the island takes on its chic evening mantle.