Takayama has a couple of important festivals (see http://www.hida.jp/english/ for events), during which accommodation is booked out long in advance, but it is also very pleasant to visit in the off peak. It snows into March, so warm clothing is advised for winter and early spring. We spent two nights there mid March 2008, and walked everywhere.
Hida no Sato
The Higashiyama Teramachi (eastern hills temple district), is a good place to wander for a couple of hours, and the Hida no Sato (Y700) folk village on the other side of town is the big highlight. Here is a collection of traditional country houses from over the centuries, with their steep roofs designed to cope with heavy snow falls, all of which you can enter. It’s a bit of a hike from the station, but only a few minutes in the bus. (The tourist information office right outside JR Takayama station has good maps and information about the combination bus ride/entry to Hida no Sato for Y900). This year there was still snow in the village and we were delighted to find free use of waterproof boots, adults' and children's sizes available. There are also some traditional buildings in town (San no machi) near the river which are now interesting shops, and the decorated floats used in the annual festivals can also be viewed, see the tourist map.
Hida no Sato folk village, Takayama
The Rickshaw Inn is often recommended by fellow travellers, and didn’t disappoint. It’s quiet, central, spotless, and has lovely staff. The guest lounge and kitchen were a bonus, and our traditional tatami room was quite spacious. They have quite a choice of accommodation, and a good website http://www.rickshawinn.com/e/index.html We self catered in this town, taking advantage of the excellent little supermarket near the river and the kitchen/dining facilities at our inn.

Communal lounge/dining area Rickshaw Inn
If you would like to see more of the old style mountain farmhouses, it is now easier to access the town of Shirakawago.
As of July 2008, a new expressway has cut the travel time between Takayama and Shirakawago down to under an hour by tourist bus. The traditional farm houses here are considered better than those at Hida no Sato, and can be visited as a day trip from Takayama, or you can stay overnight in one of the farmhouses which serve as minshuku (a sort of bed and breakfast experience).
About an hour south of Takayama, on the way to Nagoya, you will pass through Gero, a very popular hot springs town. http://www.japan-guide.com/e/e5990.html. You don't need to stay here to enjoy the onsen, there are three public baths, and lots of ryokan open their baths to the public as well. Check the website for details.
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