We are really happy of our stay in this family owned hotel.
The location was absolutly great. The room nice and clean and the staff very friendly.
Rates are honest with a good local breakfast.

We stayed here because it was cheaper than other places on Capri, but now I know why. I wish we had stayed in Sorrento and just made day trips to Capri.
NEGATIVES:
1. The shower barely worked. We just got a small light stream of water - it was useless. I felt dirty the whole time.
2. The toilet would only flush if we took the lid off and pulled the lever.
3. The room was bit dirty. Everything was very old and stained.
4. None of the staff spoke much English. (though I know I was in Italy, so there was no reason they should) It would've been nice though because they would act like they understood our questions, but their answer would be totally unrelated.
5. The entrance to the hotel had gross curtain you had to walk through every time you came and went.
6. The walls are so thin. You can here your neighbor so easily.
7. They advertise shuttle service to the marina on their website and in their rooms, but when we asked for it, they said it was unavailable.

Have just returned from a 2 night stay at the Loreley hotel in Anacapri. My experience in summary:

Location: I'd have to say that this is the best reason for staying at the Loreley. Only a couple of minutes walk from Piazza Vittoria which is the main square in Anacapri. All the buses to/from Capri/ Marina Grande stop at this Piazza. The chair lift to Monte Solaro is also a minute away. Villa San Michelle about 6-7 minutes walk away.

Rooms: Mine was very very basic but clean. It was a twin room. No view to speak of and the room was very dark so even during the day the lights had to be on. Ensuite shower/toilet was very small but pleny of hot water. Sheets were clean and extra blankets provided.

Breakfast: Very very very basic!! For all you people from the UK - not a bacon/sausage/egg in sight! But I suppose breakfast isn't a big deal for the Italians! So expect a few pieces of white bread (not soft and warm!), a croissant, and butter and preserves. The coffee was excellent though.

Staff were helpful but didn't find them overly effusive.

In summary, considering I was only in the hotel to sleep, it was fine. But if you want to relax in your hotel, then this isn't the hotel for you. Having said that, perhaps there are bettter rooms in the hotel.

I just walked in here from the cab about 3 years ago. It was recommended to me by someone on the ferry over from Naples. It was very friendly with a good breakfast, well located to Mte Solara and the certer of Anacapri.

The room was clean with a nice view of the sea, but maybe downstairs room lack the view.

While not fancy (3 star by my estimate), I enjoyed this place alot.