Kefalonia: the Greek island of Captain Corelli's mandolin

Kefalonia doesn't just appeal to the literary tourist

Greek islands have an enduring romantic appeal, in spite of the crowds they attract. Beyond the excesses on Mykonos and the infamy of Faliraki remain unspoilt beauty spots with cosy tavernas and an easy pace of life that is the stuff of summer holiday fantasy.

Tucked away on the southeastern edge of Europe, Greece feels laid back, exotic and pleasantly behind the curve of progress. The Ionian Sea, off the west coast of Greece, is a quieter counterpart to the bustling tourism of the Aegean islands. The largest of the western islands is Kefalonia, where Venetian architecture in the craggy landscape gives a distinctly Italianate feel. This month's edition of Condé Nast Traveller notes the glamour recently bestowed on Kefalonia, particularly the small port of Fiskardo, now thought rather chic. But it is still possible to escape the crowds. There are hundreds of hamlets where a peaceful hush

descends in the afternoon as the population retires for its siesta, and you can picture Penélope Cruz lustrously ambling up the winding alleyways, for this is where Captain Corelli's Mandolin was filmed - and where the novel by Louis de Bernières is set.

The magnificent coastline - Myrtos Beach, in the northwest of the island, often appears on lists of the world's best beaches - and unspoilt olive groves have attracted the attention of a British property developer, Braemore. The valley above Myrtos Beach will soon be home to Elia Valley, a bijou hotel that will include a small number of large, luxurious holiday homes, due for completion in 2011.

Braemore, which has won prizes for numerous projects in the UK and for one in Turkey, has commissioned the Greek architect Demetri Porphyrios to create a 52-room hotel in the village of Divarata. Porphyrios's work, such as his Quadrangle at Magdalen College, Oxford, has won praise for sensitivity to historic and natural settings and has drawn the attention of the Prince of Wales.

Traditional villas remain the most common type of housing on Kefalonia, as a result of strict Greek planning laws. New structures must follow the established rectangular form, be pale in colour and made of comparable materials. Porphyrios has come up with a two-storey courtyard structure in tune with the island's Italianate buildings, influenced by a period under Venetian rule during the Middle Ages. His design cleverly allows every hotel room to have a view over the valley to the sea. Elia Valley aims to be up there with the few truly luxurious hotels on Kefalonia, competing with the Emelisse and Olive Grove Studios. It will be managed by the Small Luxury Hotels of the World group.

Porphyrios has also designed 35 villas in the valley. Each villa will have its own pool, but the owners and guests of the villas will have use of the hotel pool and spa. The Muse spa, as it will be called, will draw on local resources using olive oil and herbs grown in the surrounding hills and in the hotel's own herb garden. It will also feature thalassotherapy, as marine treatments are a popular part of Greek beauty culture. In addition, the villa residents will have use of the business centre, fitness centre, tennis court, concierge room service and restaurant.

The hotel's signature restaurant will include a deli, making it easy to pick up fresh local dishes to eat at the villas. Local produce includes olives (naturally), apricots, oranges, honey and wine. The nearby Fiovos estate is Kefalonia's most distinguished wine label, selling eight varieties, and Robola wines are known worldwide.

However, Elia Valley's best asset is arguably its proximity to Myrtos Beach. A wide, white strip of sand flanked by steep cliffs, it is famed for the clarity of the water and its changing colours. In high season there are sun loungers and plenty of sunbathers, but its natural beauty remains untempered.

The hotel will organise sailing, waterskiing and a host of other water-based activities whenever villa guests fancy something energetic.

One reason why this striking island has evaded the hordes of mass tourism is that it has been somewhat harder to get to than many others. In the past you had to fly to Athens and change. There are now direct charter flights in high season to the island - although these are far less frequent than to more mainstream destinations. So the island has become much more accessible as well as being fashionable, and will become more so over the next decade.