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"Cheap" and Grand Cayman don't really work well in the same sentance. For value I really like the Sunset House. I have stayed there several times and I think they have one of the best package rates around. You aren't stuck on 7mile beach, you can walk to town, they include breakfast and have one of the best shore diving sites on the island. The Seaview Hotel just down the street is also value priced, and has a great bar/restaurant.
I just prefer Sunset House. Good luck.
US, Canadian, and British citizens can enter Cayman without a passport. A government issued identification (such as a driver's license) and a certified copy of your birth certificate is required.
The birth certificate must be one issued by a government authortiy - not the certificates issued by hospitals with the cute newborn footprints! An official copy may have a raised seal, or some other means of authentication such as a notary signature.
Do the research and compare prices, I recently did this when someone suggested Sunset House, and it seemed it wasn't really cheaper than Cobalt coast (which IMHO is a nicer place to dive and stay.) Seaview does seem like it might be a good deal but I've never been there. Ditto for Cayman Diving Lodge and Spanish Bay which are are all inclusive and not real fancy, so they might work out to be good values. You might check out http://www.tripadvisor.com, this site is good for pretty complete lists and reviews of lodgings and has listings for all sorts of inns on GC, though some aren't on the water.
If you want to save money on Cayman, you may want to look at a condo or apartment type place where you can do a lot of meals in the room. (Condos aren't necessarily cheap either.) You can also eat out more cheaply by avoiding a lot of big restaurant meals and finding fast food, delis, pizza. Someplace like Chicken Chicken is close to fast food prices (for Cayman) and pretty good food. I once found a site that had a list of cheap eats on GC but I can't find it now, maybe you can find it if you look harder then I did.
Unfortunately Coconut Harbor is no longer. Too bad as I used to love hanging out at the Blue Parrot.
Green Alien, if you are going to be diving with FishEye, then you might want to check into Wyndham's Sunshine Suites. Nice accommodations with kitchens and not too pricey. Plus, if I'm not mistaken, you can set up at package with room and diving with Fisheye. I think you can find this info on FishEye's web site.
is a website where owners at Morritts timeshare try and rent their weeks before they lose them. $800 for a one bedroom condo(sleeps 4) over christmas is a bargain by Cayman standards