Watsons Bay sits on the end of the South Head peninsula 11 kilometres from the city's central business district. It takes its name from the sheltered bay & anchorage on its western side. Watsons Bay is a mostly residential area with some recreational areas & beaches, including Camp Cove & a legal nude beach located at Lady Bay. Some restaurants, cafes & a hotel are located here. The coastal walk with ocean views of The Gap along South Head make Watsons Bay a popular tourist attraction in Sydney. Alongside Vaucluse, Watsons Bay is considered one of the most affluent neighbourhoods in Australia.