Actually, the Ein Bokek hotels are further from the Dead Sea as they are adjacent to very large evaporation ponds south of the Dead Sea. The Ein Gedi resort is not quite on the shore but there is a small transport that takes you to waters edge.
I really think there are 2 reasons for someone to stay at either place. One, to spend the night prior to hiking up Masada or to stop off on the way to Eilat. All the areas you wish to see can easily be seen in a day trip from Jerusalem, including the Ahava outlet store.
I would consider not staying in either place and instead making them a day trip out of Jerusalem.
Dr Drill, as far as I know, that large evaporation pond is a portion of the Dead sea which was cut off by the main body of water - by, well, evaporation.
The hotels in Ein Bokek are spiffier than the Kibbutz Ein Gedi guest house. Two of them are on the beach (Crowne Plaza is one, I can't remember the name of the other one). Usually the hotels in Ein Bokek require a minimum 2-night stay. I would choose Ein Gedi. The rooms are comfy, if a bit spartan, but dinner is included (not nearly as elaborate as at the hotels, but decent food) and the price also includes a visit to their spa and private beach where you can coat yourself in lots of mud and then wash it off in the Dead Sea. The Crowne Plaza has a spa center in the hotel, but mud baths (I assume they are available??) would cost extra.
The Ein Gedi Nature Reserve is a good place for a hike. You are likely to see some of the native animals and it is a pretty easy climb up to the waterfalls.
There is nothing to see at the Ahava factory, just a big store. I was there last winter and the prices were the same (including the specials) as at the shop at Masada. The site is north of Ein Gedi, so best to stop either coming or going from Jerusalem.
When you visit Masada, do watch the short movie before you go up to the top.
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