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Arenal Volcano sits near the enormous Lake Arenal, which takes up 85 square kilometers and is the largest lake in Costa Rica. The most popular city to stay in while visiting the volcano is La Fortuna, located at the north end of the lake. La Fortuna is also closest to the Arenal Volcano and other popular attractions.
While La Fortuna is great, there are many small towns around the lake you should also consider. If you are a yogi, I suggest staying at Hotel Mystica, which is on the far side of Lake Arenal and about an hour drive from the Arenal Volcano. The hotel houses a beautiful pavilion for outdoor yoga practice and impressive suites that will calm your body and mind.