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Lodging on PEI

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We're planning a two week vacation to PEI in early July with a four and two year old. We'd like a place with a kitchen and two bedrooms. I've seen some of the cottages on the web, and they look pretty basic. I was hoping for a bed and breakfast that had a cottage too, so we could have breakfast. I also thought it might be more quaint than basic/rustic. I also don't know what area of the island to stay on. Would love to be near a good swimming beach. How warm is the water in mid July?

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