Where is the best place to stay in Penang for 2 backpackers? We would prefer somewhere that's walking distance to the historical attractions and shopping.
Does anyone also have suggestions on how to get to Malacca from Penang?
This is very easy in Penang as George Town is packed with backpacker places.
Traveling between Penang and Melaka can be done with bus very cheaply and the bus company will pick you up at your hostel for free with a mini van if you ask for it.
You will need to transfer in Kuala Lumpur though but that is quite easy.
An alternative could be to fly with a company like Air Asia from Penang to Kuala Lumpur and then take a bus from there to Melaka as the Kuala Lumpur airport is actually closer to Melaka than Kuala Lumpur itself.
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I've done this exact route before from Penang to Melaka and rode the express bus. It will take several hours, but the seats are incredibly comfortable and you could even take a night bus to wake up in Melaka.
I didn't stay at a hostel in Penang, but there are dozens throughout Melaka (I had a positive experience with Backpacker's Freak Hostel