We went to Phuket for a short break last November and stayed in a condo owned by a friend of a friend. The condo is also on Air B & B as are many others. Its all about personal preferences but a condo is my choice over a hotel any day.
Phuket is much the same as its been for years - beautiful but crazily overpriced. Expect everything to cost you a lot more than it does elsewhere in Thailand. The only thing I found reasonable was car hire - but that's the power of the internet, hire companies have to be competitive.
I'd travel a bit further and go to Krabi, Phi Phi or Koh Lanta.