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In Austrailia for Christmas

Our family of four (parents and two children, ages 12 and 9) will be in Sydney for a handful of days over Christmas and Boxing Day this year. We will want to sight see some of the most famous sights (Opera House, Harbour Bridge, etc.) as well as fit in some beach time. Due to the holidays, we know we need to be aware of holiday schedules and closures. How difficult would it be to use public transport to visit family-friendly beaches (thinking more along the lines of Manly and Balmoral than Bondi because of the kids)? Would it make more sense to rent a car to visit the beaches? Should we stay in the city or on the beach (Manly)? Lastly, is there a favorite nice restaurant or hotel that puts on a festive Christmas Day lunch that we should consider? Thank you for your insight!

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Due to the holidays, we know we need to be aware of holiday schedules and closures.
Note, Xmas-New Year is peak travel time for Sydney. Public transport operates to a still regular holiday timetable. Shops close Xmas Day only. Some restaurants may close but many more will be open.

How difficult would it be to use public transport to visit family-friendly beaches (thinking more along the lines of Manly and Balmoral than Bondi because of the kids)?
Manly is easy by ferry from Circular Quay. Balmoral is less so. Choose Neilsen Park at Vaucluse instead, accessible via bus 325.

Would it make more sense to rent a car to visit the beaches?
Up to you. I wouldn’t. Parking at Sydney beaches at this time is a nightmare.

Should we stay in the city or on the beach (Manly)?
Manly is away from the action. Stay central, in the CBD.

Lastly, is there a favorite nice restaurant or hotel that puts on a festive Christmas Day lunch that we should consider?
Google ‘Sydney Xmas Day Restaurants’ for some listings.