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Of its many qualities, Palacio del Retiro wins the most points for its calming charm and perfect location. The small boutique hotel rests on the edge of Madrid's magnificent central Parque del Gran Retiro. Retiro, both the most coveted residential neighborhood and in walking distance to Chueca and Gran Via, the hopping neighborhoods known for their shopping and outrageous nightlife. (Basically, imagine Central Park West, if it started at the top of SoHo and ended somewhere in the Lower East Side.)

Though the building itself has some decorative elements of classical Madrid such as wrought-iron balconies and sweeping staircases, its style overall is understated and contemporary. The spacious bathroom's design is bright and completely modern, which is a nice balance to the dark wood floors in the bedroom. The bedrooms are comfortable and low-key with all the usual amenities, though it should be noted that WiFi is only free in the lobby.

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Although there is not much of a scene in the hotel itself, Palacio del Retiro is the ideal jumping-off point for people looking to explore Madrid.

To book, see Mr & Mrs Smith, rack rates starting at €222.

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