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Concierge.com's insider take:
Also known as Sheik Ali's Hotel, this small, mud-brick guesthouse facing the Temple of Merenptah was originally built in 1924 for University of Chicago scientists and still serves as a digging-season residence for international archeological missions. A far cry from commercial tourist restaurants, the hotel's daily alfresco Egyptian lunch and European vegetarian dinner, served in a garden courtyard, is open to anyone and is a favorite with the various tribes of Luxor's winter colony of French fashion designers, antiquities inspectors, artists, European dowagers and other local characters. The lovely garden, lined with trees and bougainvillea, is a perfect place to take a break between the rigors of west bank sightseeing. At lunch, there's usually tomato and cucumber salad, fresh-baked Upper Egyptian sun bread, rice with herbs, and whatever fish, meat or poultry the chef has prepared as a main course.
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