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I have a website that lists hotels, restaurants, bars, etc for a small resort town in Asia. I employ breadcrumbs to aid in user navigation, but I ran into an issue regarding categorization.

Many places easily fall into two categories, such as restaurants that are also bars. They can be reached by following links from the "Restaurants" pages, as well as "Bars" pages.

Is it bad practice to have TWO sets of breadcrumbs, SEO wise? Example:

Home > Dining > Mexican
Home > Bars & Nightlife > Cocktail Bars

The breadcrumbs appear just like this at the top of the page for listings which I have under multiple categories. I know it's good for user navigation, but does this adversely affect SEO, in particular how Google handles indexing of your pages?

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You should use only one breadcrumb and for SEO make sure it uses rich snippets

http://support.google.com/webmasters/bin/answer.py?hl=en&answer=185417

For all other categories which the listing fall into display them elsewhere on the page

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For readability and usability is not so good if the layout is like you wrote. Probably its better to write:

Home    >    Dining              >    Mexican
             Bars & Nightlife         Cocktail Bars

I think that it affects SEO, in a positive manner: you get more keywords and more inbound links (if the categories in the breadcrumbs are links).

But remember: user experience comes first.

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