We are a family of four and can manage with two hotel rooms but our children (22 and 20) would certainly prefer their own rooms. Three hotel rooms can be prohibitive, however, so we often stay in AirBnBs. In Chania, they are all ~15-20 minutes outside of town. We'll have a rental car or can take taxis. Planning on day trips from Chania. Is it a mistake not to stay in town?
I think you would be disappointed if you did not stay in Chania old town harbour area within the city walls. You can easily imagine you have stepped back in time in the old town.
Just google VRBO or air Bnb and you can find something that suits your needs.
Here is why I recommend staying in the old town.
Chania 2024 https://www.flickr.com/photos/stanbr54/albums/72177720318408008/
I think it depends on what you want to do. Parking in old town can be a nightmare but many hotels outside of town provide free parking and the local bus system is quite good (we parked and used the buses for several days). We stayed at the Ammos Hotel, which had a bus stop right out front. We went into Chania twice, for shopping and museums (Naval Museum is very good) , and then went hiking (we were younger then!) to a gorge (??) and visited Ancient Aptera 8-10 mi outside Chania. There is also an interesting boat excursion from Kissamos that takes you to Gramovossa with its pirate fortress and then on to Balos lagoon for the beach.
Thank you all for the helpful comments and the beautiful and enticing photos. I think we will opt for an Airbnb just outside of town. Trading off space and privacy in exchange for proximity to town. Having the car will make it a little bit more practical I think, and since we are anticipating several day trips, the value of staying closer in may be less than if we planned on sticking close to Chania.