Having spent half a week in Port Isaac, on Cornwall's north coast, in a tiny National Trust cottage called The Birdcage, we find The Old Coastguard quite a contrast. Not only do we no longer have to duck to pass through a doorway, but the sun's out for the first time all week, making Cornwall seem a whole lot jollier. We check in at a glassy reception area off the main bar, then head through a sunny lounge with yellow and green walls and floor-to -ceiling windows to a sun terrace dotted with white-clothed tables. There's a lovely lawn lightly forested with palm trees, where couples and families drink and play. At the end of the garden a little door opens onto a pebbly beach, where a resident seal likes to surprise swimmers.

I can see why the new owners Charles and Edmund Inkin jumped at the chance to take on this place. It used to be, by all accounts, a rather stiff and dowdy Victorian hotel, with a fantastic position in one of Cornwall's quaintest fishing villages. Now the brothers have added this to their portfolio of foodie boltholes, which includes The Felin Fach Griffin near the Brecon Beacons, and the Gurnard's Head, between St Ives and Zennor.

Both are renowned for good food. The Gurnard's is almost booked out year round – unheard of for a coastal hotel. Now the Inkins just have to polish up The Old Coastguard. Renovations have been on hold over the summer, and will be done "a bit at a time". Guests will have to suffer the bad carpets and wallpaper in the corridors a while longer, though the lounge and dining areas, already done, feel fun, in seasidey colours.

At first we're unsure whether our room's one that's been done or one that hasn't. It's the former – the Roberts radio and tongue-and-groove headboard should've been a giveaway, but I'm not keen on the mustardy-yellow wall paint also favoured at the Gurnard's. Wouldn't pale grey be more contemporary? Maybe I've read too much Elle Deco. But the white en suite is spic and span, the window full of the spectacular blue sea, and only the boyfriend cares that there is no TV, as he'll miss the cycling.

There are fresh flowers and some great furniture downstairs: benches and pews from auctions and vintage fairs. We scour the menu while drinking pink champagne on the lawn, and all my doubts about staycations drain away. Inside, our table for two has seats side by side, looking out to sea.

What the hotel has got right, from the off, is the food. ("That was the priority," says Charles.) Orange segments accompanying light salt-cod croquettes (£6.50) bring a refreshing sweetness; whole lemon sole with brown butter (£12) is glassy-fleshed and delicate; and roast chicken (£10.25), which shouldn't really tempt so close to the sea, hides irresistibly juicy meat under a thin crisp skin. Mousehole has a few good restaurants now, but I'd wager this is the best, and a bargain too.