Though drinking is allowed, there aren't any liquor shops or bars at Yelagiri. Even hotels don't stock liquor because they aren't licensed to. Some sell liquor on the sly but you never know if the stuff is genuine. Besides, the price can be atrociously high. You could one of two things; Option 1: Pick-up your 'stuff' at the liquor shop that's at the junction off the main road, before you start to drive uphill. Option 2: Bring your own 'fire water'. The second option is strongly recommended.
Yelagiri Hills is still far from being a most sought after holiday destination. Despite all the noise made by the Tamilnadu Government to popularize the Hills as a holiday spot, if Yelagiri Hills has had some semblance of success, it's due to the efforts of private parties and certainly not any government.
There must be around 20-30 places offering accommodation. Many call themselves 'resorts' but in actual fact, the accommodation and facilities on offer are abysmal. Hygiene, cleanliness of lodgings and food leave a lot to be desired.
Having said that, there are a few hotels and lodging houses who understand what hospitality means.
You may like to check out the following places:
Mid Valley Residence
Yelagiri Hills Country Club
Hotel Yelagiri (First Hotel in Yelagiri Hills)
VSK Boarding and Lodging
Hotel 'O' Nila
Ammu Anju Cottage and Hotel Archana
Siddharth Holiday Resorts
Hotel Nigress Boarding and Lodging (Deluxe)
Taj Gardens - An Exclusive Resort