The Istra is not glamorous by any stretch, but it is one of the few hotels on Rab that is located in Rab Town that is not a large resort complex. The dorm-like rooms are plain and have very small bathrooms. Be sure to ask for a room with a balcony (you will have a nice view of the harbor). The young staff is very helpful, and breakfast is decent.
Located at the head of Rab Town''s harbor, the Istra is just steps from all the sights, activities and restaurants the tiny town has to offer. Rab Town occupies a peninsula, and one can walk around the entire town in a matter of minutes. So, if you are interested in being near town, the hotel is perfectly situated.
The Istra had free parking for our rental car. We paid about $37 per night for two - so we knew not to expect too much. Rab Town was one of our favorite places in Croatia, so the so-so accomodations didn''t really bother us too much since the town was so amazing. We really didn''t want to stay out of town in one of the large, impersonal beach resorts that cater largely to vacationing Germans, so this was a good choice for us.
Also Check out http://www.dmmedia.com/Rab/Istra.htm for more info (in German, but with good photos and info)
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From journal Croatia's Ultimate Island