Home to the Full Moon party, once a month there are thousands of people partying on the beach. You can get there easily from Samui by taking a ferry. Resorts on Koh Phangan can be found here. and dates for the full moon party here.
Getting there: Since Koh Phangan does not have an airport you will have to go there by boat. If are on Samui you can take the ferry (3 times a day) from Big Buddha pier. This ferry goes directly to Haad Rin Beach. You can also take a boat from two other piers on Samui, Nathon and Maenam, but these boats will arrive at Thong Sala which is the largest "town" on Phangan. From Bangkok to Phangan most people will take either a bus or train to Surathani and from there go by songteaw (local taxi) and boat to the island. Combination tickets are often being sold at the Hua Luampong train station but tickets can also be bought on the spot.
Full Moon Party: The full moon party is held (as you might expect) every month during full moon on Haad Rin Beach. If you want a room for the Full Moon party make sure you book it at least a week before since all the rooms will be full on your arrival. The party itself is great fun with drunk people all around and all the bars playing different styles of music which creates a mixture of 10 different sounds. Be careful when offered drugs since the Thai government does not really like the party so they send some undercover cops to the place, if you take it they bust you. There is a place called Mushroom Mountain and its on the little hill on your left (if you face the sea). Go up there and ask for the Special Shake, its 500 Bath but its worth it. The party usually goes on until the next day with die hards leaving the next afternoon.
Other areas: If you are looking for a more peaceful time on Koh Phangan you should visit the Northern part of Thong Nai Pan with beaches Ao Thong Nai Pan Yai (big) and Ao Thong Nai Pan Noi (small). Haad Mae Haad has some of the best diving spots on Koh Phangan while Haad Salad caters more to the up scale market (an increasing number of visitors are families nowadays)
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