I called more than 10 hotels in Canela and Hotel Pequenino had the lowest rate: R$150 (~U$86). Almost all the other hotels ranged R$250-350/night (U$144-201). This was during the pre-Christmas festivities when hotels in Gramado and Canela at least 90% full. My wife, the kids and I just needed a place to crash before continuing the trip the following day....
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