Why in some places it is more than worth to stay in luxury hotel

I travel frequently. I travel immensely. Therefore, I believe that I can say that I know much about travelling. I often look for the the less expensive accommodation possible. I usually don’t mind tiny and gloomy room, usually even with no private bathroom. In such situations I keep convincing myself that this is not important how my apartment looks like as I will do sightseeing the most of the time anyway. But there are various locations where it just doesn’t work like that. And one of these places in Santorini.