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Cape Town - things to do IN THE CITY and where to stay?

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In November, we have been lucky enough to get a home exchange in Somerset West for 2 weeks. We will have a vehicle in Somerset West. PRIOR to that time, we will be doing a tour of the garden route and safari at Lalibela.

Before we go on the garden tour, I am thinking of going to a hotel directly in the city of Cape Town to recover from our jet lag and see the city itself. We DO NOT want to drive in the city, so we will be limited to public transport and taxi. We mostly enjoy spending time in areas with locals, eating and drinking in pubs, seeing a few tourist things (but since we'll have two weeks in Somerset West, we will have plenty of time to visit the penguins, Table Mountain and wine country from there). We are American Senior Citizens and tend to book moderate hotels or B&B's. We are not luxury travelers, in most cases, but neither are we sharing a bathroom.

Where area should we stay for 2-3 nights in Cape Town? Hotel recommendations? What shall we see and do while there?

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