Most Madrileños will tell you that prices have risen fairly steeply since the euro came to Spain's capital. Even luxury options represent good value for money. The compact centre has hundreds of possibilities, from five-star magnificence to simple, clean guesthouses called hostales (or pensiones), tucked away in narrow streets lined with balconies and anonymous laundry.
Savvy surfers can find slashed prices by booking over the internet, even in summer when the streets throng with excitable students and Americans peering at maps. Apart from the suitably exceptional Puerta de America, we have deliberately chosen the best hotels in central locations so that you are within an olive stone's throw of attractions like the Prado, the Reina Sofia, the Thyssen, the Gran Via and the leafy escapism of the Retiro. And if you do adjust to the pace of this late-night collision of history and cutting edge, it's a brief stagger home in the (not so) small hours. The hotels are listed by price category, and their order bears no reflection on our preference.
Luxury: a new addition that is a masterclass in quiet refinement.
Location: In the Plaza de la Independencia, overlooking the arch of the Puerta de Alcalá and the leafy Retiro park.
Dating from 1883, this Bourbon Restoration red-brick building is cleverly positioned on the edge of Salamanca and the city's sights. The 31 stately rooms are done out in elegant whites and greys and we love the Duplex Suites with beams in the attic. The Bodyna spa, set in a separate centre in the interior space, is ideal for getting lost in and the Senzone restaurant has excellent dishes and a sommelier to match.
Luxury : a former palace that combines homely charm with subtle decadence.
Location : tucked away among what were once the nobility's 19th-century mansions in Chamberi
Built in 1894 for the Duke of Santo Mauro, contemporary interiors blend with French architecture. Think creaking wooden floors and a stone staircase for princesses to sweep down. The 51 rooms are wonderfully spacious, with beds like football pitches. There is a pool and a fitness room in the quiet basement and the library is now Faisandé, a book-lined nook for breakfast or supper. Dine outside in the garden in summer.
Luxury : crisp, white and cool.
Location : On the lively Plaza de Santa Ana, close to the Puerta del Sol.
You can't miss the iconic lighthouse on the top of this former hotel for bullfighters, and the rooftop bar has wooden decking and little pagodas to lounge in. Minimalist white rooms come with Aveda goodies in the bathroom and orchids and quotes from the famous to add colour. They can even supply i-Pods and beds for pets. The Midnight Rose restaurant has great food and a fabulous winelist and the bar is popular with an urbane crowd.
Luxury : a fashionable delight of steel, glass, wood and leather.
Location : close to Sol, the Plaza Mayor and the bars and restaurants of Huertas.
Don't be surprised to find a phallic carved wooden pole or tiny Buddha in your hip, uncluttered room decked out in teak and dark leather. Jordi Clos, an archiologist from Barcelona and the owner, likes to share his artefacts. The food and wine at the Europa Decó restaurant is sumptious and beautiful people quaff cocktails in the popular Glass Bar. Ascend to the plunge pool on the roof in summer to outfox the heat.
Luxury : Twelve unique floors, each designed by a different world-class architect.
Location : close to the airport and the IFEMA exhibition centre, it's out on a limb but at the top of the design tree.
A recent milestone in hotel design, despite being out of the city centre you won't want to leave this extraordinary place. It's like being in several film-sets at once, from cutting-edge Asian to pure Star Wars. Ride the lifts and see how differently Norman Foster and Zaha Hadid think. Even the basement car park is photogenic. There's also modern Spanish cuisine in the restaurant, Lagrimas Negras (literally 'black tears'), and a rooftop pool and bar.
Luxury : Muted luxury with a secret underneath.
Location : Overlooking the Retiro park and wonderfully central.
Built in 1908, the owners of this grand Edwardian pile used to exercise their horses on the roof. It's functional comfort mixed with belle-epoch décor and ironically the fourth floor, where the servants lived, has lovely wide corridors and low ceilings. Room 409 is atmospheric, with semi-circular windows. In the fine basement spa (uncommon in Madrid hotels), do a circuit of the sauna, Jacuzzi, steam room and cold shower before snoozing on the heated wooden recliners.
Mid Price : the writing is on the wall at this cool location.
Location : on the main drag of the Gran Via, in the heart of the city centre.
With vivid reds and oranges and quotes and quips from literary figures in each room, this comfortable hotel is perfectly situated in the middle of the city. The roof terrace has black decking, white seats and fabulous views of lost statues and unknown clocks above the busy streets. DL'S Restaurant has mouth-watering Japanese food and the bar gets busy over the weekend. In the dark, relaxing basement spa try Watsu (water shiatsu), which is aquatic and different.
Mid Price : Modern elegance and restful comfort.
Location : On Calle Goya, in the swish Barrio de Salamanca.
Hotel Bauzá is a calm and slickly-designed refuge from the Calle Goya and its bustling shoppers. Wooden floors, red walls and black and white prints in reception give way to quiet corridors and very comfortable beds. Room 902, one of three suites, has a wooden-decked terrace with lanterns and views of the jumbled skyline southwards. The library has a gas fire and comfy sofas but the star is the restaurant, serving superb Mediterranean cuisine with colourful retro crockery.
Inexpensive : avant-garde design with a surprising pricetag.
Location : On the Plaza de Vázquez de Mella, in the gay quarter of Chueca.
Conceived by the famous interior designer Tomás Alía, this dark 1970s-style block taking up one corner of this busy central square cuts a swathe through dull accommodation. Reception is a visual feast and helpful staff guide you to dark corridors and very different rooms, from wide-awake orange to vivid lime green. Go for a suite and linger over breakfast, which overlooks the Plaza. The shopping and nightlife of Chueca couldn't be closer.
Inexpensive : Four-star but you can pick up a bargain if you choose your moment.
Location : in the 'Art Triangle' near the three major museums, in the Las Letras neighbourhood.
Made up of five historic buildings fused together, modern fabrics adorn the wall and all the modern, spacious rooms have air-conditioning. There is an abnormal amount of lounging space behind reception, as well as an excitably red bar - listen in on important business discussions among the hanging fabrics. Have a buffet breakfast on the high, comfortable stools and don't miss cañas on the outdoor terrace when it's warm.