Ölüdeniz is all about the setting, and what a stunning place this is. Arriving here, you pass through beautiful scenery, only to have this azure lagoon come as the journey's climax.
Of some strange reason, Ölüdeniz means "Dead Sea", but it is definitely not a place you want to avoid.
Today the area includes the lagoon of Ölüdeniz and the beach area that continues south to Kıdırak. The further you get from the lagoon, the thinner the crowds. Ölüdeniz faces the challenges of overdevelopment, with its increasing popularity, many tourist villages have bene built here and thereby changing the whole feel of the place. Until the 1980's, Ölüdeniz was very much off the beaten track, today backpackers increasingly seem lost here.
Practicalities
The hotel situation is not bad at all, although there is little on offer for the travellers on the tightest budgets except two camping options. Value for money is overall good.
Restaurants in town are clearly affected by tourism, which means that enthusiastic owners have been replaced by money-tellers. Expect that food is OK and overpriced. As a nice exception, check out the Oba.
Local activities here include boat trips and paragliding. The latter is especially attractive here, with the 1969 metre high Baba Mountain just a few kilometre inland. It is possible to rent a piloted tendem paragliding flight. Just note that every year brings new deaths from this activity here.
Connections in and out of Ölüdeniz are fair, there are minibuses that all connect to Fethiye, about 30 minutes away. In high season there is one every 10 minutes.
Also camping. 
