Kas is such a relaxing place. Highly recommend it. We stayed here:
Simple, but clean rooms with air con and nice balcony area with stunning views of the town and Kastellorizo. Doubles around 50 Euros a night in summer. Cheaper out of season. Around a 10 minute walk down the hill into the town centre. about 8 years ago
My suggestion is to arrive into the town and then locate a pansion that fits your requirements. Kas has an abundance of cheap, good accommodation. I prefer to stay in the main town.
Head out of the bus station and walk towards the town. Lots of great pansions set back off the road on your right hand side. Wander in and have a look at the rooms and decide.
The other place I like staying is the other side of town - away from the bus station. So walk into the main square, and then head up the road (next to Mercan Restaurant) towards the police station. At the top of the hill, look directly in front of you - there are a lot there. I like Caretta (turtle) Pansion. If you turn right, there are some smaller hotels overlooking Small Pebble Beach, with pansions up behind them. You really are spoilt for choice. almost 8 years ago
I was there 2 days ago and i stayed @ sardunya hotel which has own beach and a perfect garden that you can have a cold beer while watching the meis ( greek island) and maybe if ur lucky can see suleyman ( caretta caretta which visits hotel's beach regularly and named as suleyman ) :) almost 6 years ago