In the cave are mixing bowls and stone jars with 2 handles. The bees store their honey there. There are stone looms, very tall, where the nymphs weave cloaks dyed with the purple of the sea, a marvel to behold, and ever-flowing water within. There are two doors to the cave, one to the north where men go down. The entrance to the south is for gods.

Naiads are fresh water nymphs and this description fits a fresh water cave, though it can easily have lost its fresh water character due to the erosion of the sea, which also probably caused the second opening to disappear. However, there's also another cave nearby, called Giovanis, which might have been the second 'door'.

Cave of the Naiads

The Papanikolis Cave is the second biggest in Greece and located on the island Meganisi (Taphos). In summer hundreds of tourists visit this cave every day and I was one of them. It's very impressive and surely a feature Homer couldn't overlook if the Phaeacians did row that far.

Odussey Book 13 line 104-110 Barry B Powell

Cave of the Naiads, now known as Papanikolis

The cave is not a real sea cave, it's a karst cave, made by fresh water from the island dissolving the limestone, then further widened by the sea.

It seems fairly obvious that the Papanikolis cave is the cave of the Naiads, but through another misinterpretation by mainstream scholars, who located the cave as well as the 'big olive tree' both inside the return harbour, it was unjustly discarded, in my humble opinion.