Planning a trip to Madrid and wondering where to base yourself? Choosing the right neighbourhood can completely shape your experience in Spain’s capital. This guide covers our top recommendations for areas and hotels in Madrid.
By: Paul Healy | Last Updated: | Jump to Comments
The thing we love most about Madrid is that it still feels like a very lived-in city.
In the historic centre, narrow lanes are filled with vintage boutiques, old-school tapas bars, tiny record shops, and casual terrazas that stay lively well into the night.
Some neighbourhoods feel gritty and unpolished, others are grand and regal with wide boulevards and elegant plazas, but all of them offer that unmistakable madrileño energy.
The bonus is that you can stay in characterful, local areas and still be just a short walk or metro ride from the major sights.
We’ve spent a lot of time in Madrid over the years and have stayed in several different neighbourhoods. In this guide, we’ll break down the best areas to stay based on your travel style, along with our top accommodation picks in each area.
For trip ideas and logistics, read our guide to the best things to do in Madrid.
QUICK RECOMMENDATIONS
- Best for First-Time Visitors: Sol / Centro
- Best for Nightlife: Malasaña or Chueca
- Best for Art Lovers: Barrio de las Letras
- Best for Local Atmosphere: La Latina
MAP: WHERE TO STAY IN MADRID
Use this interactive map to explore Madrid’s best neighbourhoods. Each neighbourhood is colour-coded and includes our recommended hotels.
USING OUR MAPS. Click on the top right corner to open in the Google Maps app. Click on the star to save to your Google account.
BEST NEIGHBOURHOODS IN MADRID
1. SOL & CENTRO (BEST FOR FIRST-TIME VISITORS)
If it’s your first time in Madrid and you want to be at the heart of the action, Sol and the surrounding Centro district is a great choice.
This is Madrid’s geographic and commercial centre, with Puerta del Sol marking kilometre zero for Spain’s road network.
You’ll be within walking distance of Plaza Mayor, the Royal Palace, Gran Vía, and multiple Metro lines.
It’s buzzing with energy at all hours of the day, which can be great. The downside is that it’s not the quietest area in Madrid. It’s also one of the most touristy neighbourhoods.
OUR SOL HOTEL RECOMMENDATIONS
- Gran Hotel Inglés (€€€€€) – This five-star boutique hotel is a beautifully restored 19th-century building with Art Deco-inspired design and a wonderful rooftop terrace.
- Hotel Moderno (€€) – Contemporary style with classic Spanish hospitality. Rooms are compact but cleverly designed, and the rooftop bar is a hidden gem with panoramic city views.
- Hotel Preciados (€€€) – A modern hotel just steps from Puerta del Sol with minimalist design and comfortable rooms.
- Woohoo Suites Madrid (€€) – A hybrid hostel-hotel offering both dorm beds and private rooms. The social areas are lively, making it easy to meet other travellers.
2. MALASAÑA (BEST FOR NIGHTLIFE & HIPSTER VIBES)
Malasaña is Madrid’s bohemian heart—a neighbourhood that feels genuinely lived-in rather than put on for tourists.
This is where Madrid’s alternative scene thrives. Vintage boutiques, record shops, hole-in-the-wall bars, and street art create a creative, slightly gritty atmosphere.
It’s our favourite part of Madrid.
Malasaña is great for browsing independent shops and enjoying Madrid’s fantastic coffee scene; it’s also the city’s main nightlife destination.
It can be a little noisy at night depending on where you’re staying, and it’s certainly not a polished tourist zone. But we love it.
OUR MALASAÑA HOTEL RECOMMENDATIONS
- 7 Islas Hotel (€€€€) – This stylish boutique hotel with minimalist Scandinavian-influenced design captures Malasaña’s creative spirit whilst offering genuine comfort.
- room00 Chueca Hostel (€€€) – Located on the border of Malasaña and Chueca, this modern hostel offers both dorm beds and private rooms. The common areas are designed for socialising, with regular events bringing guests together.
- Onefam Madrid (€€) – Social, design‑forward hostel with private rooms and dorms just off Gran Vía on the Malasaña side.
- Tribu Malasaña (€€€) – A contemporary hostel blending industrial-chic design with the neighbourhood’s bohemian character, featuring both shared and private accommodations.
3. CHUECA (BEST FOR LGBTQ+ TRAVELLERS & DINING)
Chueca is Madrid’s vibrant LGBTQ+ district, known for its inclusive atmosphere and cool dining scene.
The neighbourhood is centred around Plaza de Chueca, a lively square lined with outdoor terraces. Rainbow flags fly proudly, and the area hosts Madrid’s massive Pride celebration each July.
This is one of Madrid’s most dynamic neighbourhoods, with a mix of traditional tapas bars, quirky boutiques, and stylish cocktail bars.
On the downside, it can be noisy, especially at weekends, and it’s very urban—there are limited green spaces.
OUR CHUECA HOTEL RECOMMENDATIONS
- Petit Palace Chueca (€€€) – Part of a reliable Spanish chain, this property occupies a grand building near Gran Vía. Rooms blend period features with modern amenities.
- Room Mate Oscar (€€€) – This design hotel captures Chueca’s playful spirit with bold colours, contemporary art, and clever use of space. Rooms are compact but well-designed, and the rooftop bar offers excellent city views.
- Fuencarral Adeco (€€) – A practical, no-frills hotel on Calle Fuencarral offering straightforward accommodation. The simple, comfortable rooms are very good value.
- Hostel Abril (€€) – A welcoming budget option combining homely atmosphere with essential amenities in a converted residential building.
4. BARRIO DE LAS LETRAS (BEST FOR ART LOVERS)
The Literary Quarter (Barrio de las Letras) sits between Puerta del Sol and Retiro Park, named for the famous writers who lived here during Spain’s Golden Age.
This is Madrid’s cultural heart, home to the Prado Museum, Reina Sofía, and Thyssen-Bornemisza—three of the world’s finest art collections within walking distance of each other.
The neighbourhood retains an intellectual, slightly bohemian character, where you’ll find literary quotes embedded in the pavement.
You’ll also find a really good mix of traditional restaurants and innovative eateries.
It’s also relatively quiet for such a central location, with residential streets that feel removed from the tourist bustle despite being a five-minute walk from Sol.
WHERE TO STAY IN BARRIO DE LAS LETRAS
- Hotel Urban (€€€€€) – This five-star design hotel is an art gallery in itself, with a remarkable collection of African, Asian, and pre-Columbian art throughout the public spaces. They have a fantastic rooftop terrace and pool.
- ME Madrid Reina Victoria (€€€€) – A modern luxury hotel overlooking Plaza Santa Ana, the heart of the Literary Quarter. The rooftop bar is one of Madrid’s most spectacular, with 360-degree views.
- Catalonia Las Cortes (€€€€) – This boutique hotel occupies an 18th-century palace, with original features and a peaceful interior courtyard.
- Hostal Persal (€€) – This family-run hostel offers exceptional value in a prime location. Rooms are simple but spotlessly clean, and the building has been recently renovated.
5. LA LATINA (BEST FOR TAPAS & LOCAL ATMOSPHERE)
La Latina is one of Madrid’s oldest neighbourhoods, a maze of narrow medieval streets filled with traditional taverns, Sunday flea markets, and the city’s best tapas scene.
This is where Madrileños come to eat and drink. On Sundays, locals flock here after browsing the El Rastro flea market to graze through tapas bars.
The neighbourhood has an authentic, village-like feel despite being minutes from Plaza Mayor. You’ll find three-generation family-run bars, elderly locals playing cards in corner cafés, and washing hanging from balconies above cobblestoned streets.
As a word of caution, La Latina is very busy on Sunday afternoons.
WHERE TO STAY IN LA LATINA
- Posada del León de Oro (€€€) – This restored 18th-century coaching inn is full of character, with original features like wooden beams and tiled courtyards.
- Hostal La Macarena (€€) – This traditional Spanish hostal offers simple, clean rooms at bargain prices. Don’t expect luxury, but you’ll get a comfortable bed, friendly service, and an unbeatable location in the heart of La Latina.
- Hotel Porcel Ganivet (€€) – A modern mid-range hotel with comfortable and contemporary amenities near major museums and attractions.
- Limehome Madrid Calle de la Paloma (€€) – A serviced apartment concept providing independent living spaces with kitchenettes and smart technology for self-check-in.
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