The location is outside Selcuk, but they offer regular free transfers to hostel from bus station. You can walk relatively easily in 50 mins to Ephesus from hostel. It's got a great atmosphere but there weren't a lot of people when we stayed and I imagine it's loud when there's lot of people. Staff were nice (Aussie/Turkish mix) and got involved with us playing pool which was fun as it meant everyone got to know each other.
You can tell the owners of this hotel take great pride in their establishment. They took us to the terraces and the bus depot free of charge and we had a nice walk back (it's not a long walk at all). The pool/restaurant area is really lovely and the food selection was good and our room with ensuite was great (with comfy beds).
Mustafa was really nice and helpful, hotel has good information for tourists, hotel was small but nice with a good Turkish breakfast (including fresh fruit). Great location to both sections of main shops and restaurants and it's close to the bottom of the hill too. Also, pretty much none of the hotels in Goreme are actually in caves but they're all called cave hotels but this one is made of stone so has the feel of a cave sometimes
We booked a private room and ended up in a totally different hotel with average facilities. We had booked with this hostel twice and ended up in another totally different hostel on our second trip back to Istanbul. It was average in this regard however all three hostels were in a great location, they were clean and the staff are really friendly