We recommend the Icicle Inn. This the the first hotel you'll see if you're coming from Seattle, and also the packet pick-up location.

All hotel space during Oktoberfest is limited in Leavenworth—reserve early. Contact the Leavenworth Chamber of Commerce and they can tell you what's available.   

Additional lodging in Wenatchee, scenic 20 minute drive south. Contact the Wenatchee Visitors Bureau for lodging info in Wenatchee.

There are also plenty of vacation homes and cabins around Lake Wenatchee, which are findable on the web with a Google search.