Updated: 4/18/22 | April 18th, 2022
Ernest Hemingway said that Madrid is the most Spanish of Spanish cities. Spend some time in this urban center of 3.2 million people (6.7 in the greater metropolis) and you’ll get a taste of all of Spain, as people from every region have flocked to this handsome capital.
The city came to prominence in the Middle Ages and was conquered and invaded by armies throughout the centuries, which helped it develop its cosmopolitan flair. It was heavily damaged during the Spanish Civil War, as it was a bastion of anti-fascist support. Several battles took place in Madrid itself before it finally fell to Franco’s Nationalists.
Today, it is a bustling hub for foodies and night owls and a sprawling capital with tons to see and do. You could easily spend a week here and never get bored.
But that means there’s a lot of ground to cover if you want to really get a sense of Madrid: within its 21 districts, there are a whopping 131 neighborhoods, each one oozing with its own unique style.
For the visitor who is only staying, say, a few days or a week, this means you had best have an idea about what part of town you want to plant yourself in.
Since Madrid is so massive, in this post, I’ll break down the best neighborhoods for different kinds of trips, so you can decide what’s best for you.
But, before I get into specific neighborhoods and recommended places to stay, let me answer some of the most common questions I get asked:
What’s the best neighborhood in Madrid for budget travelers?
Argüelles is filled with affordable bars, cheap accommodation options, and good but budget-friendly restaurants.
What’s the best neighborhood for families?
Retiro is near the park of the same name, and it’s also very quiet and sedate.
What’s the best neighborhood for nightlife and partying?
For the last 20 or so years, Chueca has been the neighborhood for general nightlife fun, as well as a central spot for the city’s LGBTQ community.
Where to Stay for First-Time Visitors: Sol
The sun, or sol in Spanish, is the center of our solar system. And so Sol, or the lovely plaza Puerta del Sol, is the (nerve) center of Madrid. If it’s your first time in Spain’s capital, this is the place to plant yourself for a while. All the main sites of the city are either in Sol or near it. Be sure to spend some time lingering there to people-watch and get a sense of the local pace of life.
Best Places to Stay in Sol
- BUDGET: The Hat Hostel – This boutique hostel is centrally located and really comfortable. It has an excellent breakfast spread, free Wi-Fi, and an outdoor terrace, and is walking distance to all the main sights in the area.
- MID-RANGE: Petit Palace Puerta del Sol – Housed in a 19th-century building a few steps from Puerta del Sol, this 64-room property is a bargain given its amenities and location. The rooms have flat-screen TVs, Wi-Fi, hardwood floors, and hydro-massage showers. Request a streetside room for a lovely view.
- LUXURY: Four Seasons Madrid – The new Four Seasons might be the most expensive hotel in town, but it’s also comfortable to the nth degree. The 200 rooms are fit for a prince, and the indoor pool and rooftop restaurant might make you want to trade some of that city exploring time for hotel exploring instead.
Where to Stay for Budget Travelers: Argüelles
Argüelles is a centrally located swatch of town, just a casual stroll from Sol and hip-and-happening Chueca. But given that it’s crammed with university students, it is also overflowing with cheap bars and affordable accommodation options. Don’t miss the nearby Temple of Debod, an ancient temple from 200 BCE that was carted from Egypt and reconstructed here, as well as the immaculate neoclassical Sabatini Gardens.
Best Places to Stay in Argüelles
- BUDGET: ApartHotel Rosales – Offering no-frills apartments with AC and Wi-Fi, this is a budget-friendly choice a mere stone throw away from the sprawling greenery of Parque del Oeste.
- MID-RANGE: Hotel Indigo Madrid–Princesa – Located just steps from the Argüelles metro station, the Indigo is an excellent mid-range accommodation option. The 101 rooms have the usual amenities — Wi-Fi, plus-sized TVs, coffee makers — and the property itself boasts a gym and a lovely breakfast spread in the in-house restaurant.
- LUXURY: VP Plaza España Design – If you’re going to splurge while staying in Argüelles, this is the place to lay your weary head. The hotel, located on the edge of the district, has an eclectic array of spacious rooms, some boasting walk-in closets, others with terraces overlooking the neighborhood. The 12th-floor Gingko rooftop bar offers spectacular views too.
Where to Stay for Hipsters: Malasaña
Known to most Spaniards as being the center of the countercultural Movida movement, sparked when the Franco dictatorship ended in 1975, Malasaña still inspires creativity. You can feel the energy in the bustling Plaza del Dos de Mayo. The area is overflowing with hip shops and bars and is very student-friendly. Spend some time café-hopping or browsing the many vintage stores around the neighborhood. If you’re a night owl, there are plenty of lively bars and clubs here too.
Best Places to Stay in Malasaña
- BUDGET: Hostel One – This hostel is clean, spacious, and social. The bunk beds are basic but comfortable, and there is plenty of common space to hang out and meet other travelers. There are regular communal dinners and nightly events too!
- MID-RANGE: Ibis Madrid Centro – Located on the northern tip of Malasaña, this hotel has comfy options that will suit the taste of any traveler. There are numerous bars nearby and the breakfast spread is top notch.
- LUXURY: Círculo Gran Vía – As the name suggests, this lovely property sits on the wide, bustling Gran Vía, the city’s main thoroughfare, right on the edge of Malasaña. The 71 soundproof rooms have mid-century modern furniture, coffee machines, and USB ports. Some rooms look out onto the back courtyard and others to the Gran Vía.
Where to Stay for Art Lovers: Lavapiés
This trendy neighborhood has many dimensions. It’s heavily dominated by immigrants (so if you’re looking to sample some non-Spanish food, this is the place) and has a lot of cool tapas and cocktail bars. If you’re an art lover, there’s art galore, including street art, the Centro de Arte Reina Sofía, and the nearby slaughterhouse-turned-contemporary-art-center Matadero Madrid. The botanical garden borders the neighborhood, and the sprawling 19th-century El Retiro Park is just a stone’s throw away.
Best Places to Stay in Lavapiés
- BUDGET: OK Hostel – A super social hostel that organizes all kinds of events, including beer pong, communal meals, pub crawls, and more. The hotel has AC too so you can stay cool on those blistering summer days.
- MID-RANGE: Hotel Paseo del Arte – A good deal for what you get, the Paseo del Arte’s minimalist-designed rooms have ample amounts of natural light. Located on the border of Lavapiés and Cortes, each room has safe boxes, AC, and work desks. Located very close to the Centro de Arte Reina Sofía.
- LUXURY: Tapestry Atocha – This Hilton-owned hotel is one of the poshest properties in Lavapiés. Rooms are equipped with bigger-than-average TVs, plush bathrobes, and espresso machines. It’s right on the border of arty Cortes as well.
Where to Stay for Luxury: Salamanca
The irony of this pretty and leafy neighborhood is that when it was established in the late 19th century, it was originally meant to house blue-collar workers. Today, Salamanca is the place to find the stylish set. Streets are lined with upscale cafés and Spanish-owned designer boutiques. That said, you don’t have to belong to the 1% to enjoy Salamanca. There’s a lot of free eye candy to take in too, including the Puerta de Alcalá arch (which dates to the 18th century) and the relaxing El Retiro Park, which is just south of the district.
Best Places to Stay in Salamanca
- BUDGET: Hotel Catalonia Goya – It’s almost hard to believe there’s an affordable hotel in Salamanca, but then there’s this one. Rooms are clean and stylish, with safe boxes, Wi-Fi, and flat-screen TVs. The hotel also offers a pretty nice breakfast spread.
- MID-RANGE: VP Jardín de Recoletos – This four-star hotel boasts spacious rooms and an on-site Mediterranean restaurant. A continental spread is offered every morning and you’re just a quick 15-minute walk to the Prado.
- LUXURY: Hotel Único – This is the place to splurge. Offering high-thread Egyptian cotton sheets, hardwood floors, and luxury bath products, the 44 rooms here are impressive. There’s also an in-house Michelin-starred restaurant in case you’re feeling peckish.
Where to Stay for Families: Retiro
Located on the quieter, eastern side of El Retiro (“Park of the Pleasant Retreat”), Retiro is a peaceful district and the best place for taking advantage of the park. It’s especially good if you have kids who like verdant, leafy landscapes. The 17th-century park, once owned by the Spanish monarchy, was declared a UNESCO World Heritage Site in 2021.
Best Places to Stay in Retiro
- BUDGET: Ayre Gran Hotel Colón – Set further east from the park, Ayre’s 338 rooms are bathed in natural light. They all have the modern trappings you’d expect, such as wireless internet, TVs, safe boxes, etc. There’s also a gym and daily laundry service.
- MID-RANGE: Hotel Claridge – Located in the heart of the neighborhood, Claridge has affordable rooms all with the trappings of luxury. Rooms are big, and there are work desks, AC, leather headboards, and nice bath products.
- LUXURY: Hotel Palacio del Retiro – If you want extreme luxury in Retiro, you’ll have to wander across the park to this chic hotel. Rooms have plush king beds, complimentary bottled water, coffee makers, and tubs, and some have outstanding views of the area.
Where to Stay for Foodies: La Latina
One of the most charming neighborhoods in Madrid, with plentiful sloping cobblestone streets, La Latina is the culinary epicenter of the Spanish capital. In addition to the bounty that is Mercado de la Cebada, streets are flanked by great tapas bars around Cava Alta and Cava Baja. Don’t miss the sumptuous roast suckling pig at Sobrino de Botín, established in 1725 and (apparently) the oldest continuously operated restaurant on the planet.
Best Places to Stay in La Latina
- BUDGET: Hostal Rofer – This no frills hotel is just 100m from the metro and offers basic accommodation. The rooms may be small but everything is clean and the staff are super helpful. It’s perfect for the no-nonsense budget traveler.
- MID-RANGE: L&H La Latina – This aparthotel is perfect for travelers who want extra space. Every room has W-Fi and AC and there are even larger family-sized rooms for groups. Reuqest a room with a balcony or terrace for a more relaxing stay.
- LUXURY: Pestana Plaza Mayor – Technically located just north of La Latina in Los Austrias, this swanky palace boasts a rooftop bar, spa, rooms with Nespresso machines, and daily newspaper delivery. Some rooms have views of Plaza Mayor too.
Madrid may be humungous, but when you narrow it down to a handful of the central neighborhoods, it becomes very manageable. With its delicious tapas bars, lively bar culture, world-class museums like the Prado, and best of all, friendly people, it’s quite easy to love. Find the neighborhood that is right for you, make it your base, and dive deep into this city.
Get Your In-Depth Budget Guide to Europe!
My detailed 200+ page guidebook is made for budget travelers like you! It cuts out the fluff found in other guides and gets straight to the practical information you need to travel while in Europe. It has suggested itineraries, budgets, ways to save money, on and off the beaten path things to see and do, non-touristy restaurants, markets, bars, safety tips, and much more! Click here to learn more and get your copy today.
Book Your Trip to Spain: Logistical Tips and Tricks
Book Your Flight
Use Skyscanner or Momondo to find a cheap flight. They are my two favorite search engines because they search websites and airlines around the globe so you always know no stone is left unturned. Start with Skyscanner first though because they have the biggest reach!
Book Your Accommodation
You can book your hostel with Hostelworld as they have the biggest inventory and best deals. If you want to stay somewhere other than a hostel, use Booking.com as they consistently return the cheapest rates for guesthouses and cheap hotels.
Don’t Forget Travel Insurance
Travel insurance will protect you against illness, injury, theft, and cancellations. It’s comprehensive protection in case anything goes wrong. I never go on a trip without it as I’ve had to use it many times in the past. My favorite companies that offer the best service and value are:
Looking for the Best Companies to Save Money With?
Check out my resource page for the best companies to use when you travel. I list all the ones I use to save money when I’m on the road. They will save you money when you travel too.
Want a Guide?
Madrid has some really interesting tours. My favorite company is Take Walks, which has expert guides and can get you behind the scenes of the city’s best attractions. It’s my go-to walking tour company!
Want More Information on Madrid?
Be sure to visit our robust destination guide on Madrid for even more planning tips!