Madrid is Spain's capital and its political, economic and cultural centre, a city of broad boulevards, historic squares and major art museums. Its landmarks include the Plaza Mayor, the Royal Palace, the Buen Retiro Park and the "Golden Triangle of Art" along the Paseo del Prado, made up of the Prado, Reina Sofía and Thyssen-Bornemisza museums.
For a visitor, the useful way to think about Madrid is as a compact centre ringed by residential districts. The historic core, the museum axis along the Paseo del Prado and the streets around Sol hold most of the sights, while neighbourhoods a short distance to the north offer lower rates and a more everyday feel. This guide covers which areas to base yourself in, what each is like, and how the accommodation tiers differ.
Best areas to stay in Madrid
1. Sol and the historic centre
Sol and the surrounding historic centre put you within walking distance of the Plaza Mayor, the Royal Palace and the main shopping streets. This is the most convenient base for a first visit, when you want the sights on your doorstep and don't mind paying for the location.
You'll find budget hotels and B&Bs here alongside mid-range hotels, and cheap hostels in the Sol area. It is the busiest, most tourist-oriented part of the city, so expect noise and higher rates than in the districts just outside it.
2. Barrio de las Letras
The Barrio de las Letras sits close to the centre and is well represented across the accommodation tiers. Budget hotels and B&Bs can be found here, and it is also one of the districts where mid-range hotels are concentrated.
It suits travellers who want a central location with a slightly quieter, more residential feel than Sol, while still being within easy reach of the Prado and the other museums.
3. Paseo del Arte
The Paseo del Arte area runs along the museum axis and is where many mid-range hotels are concentrated. It also appears among the areas with plush hotels.
This is the obvious choice if the Prado, Reina Sofía and Thyssen-Bornemisza are the focus of your trip, since you can reach them on foot.
4. Chueca
Chueca lies just north of the centre and is one of the districts where budget hotels and B&Bs are found. It is a practical alternative to the core for travellers watching their spending.
Staying here keeps you close to the centre while putting you in a district with its own character and local restaurants.
5. Malasaña
Malasaña is about 1 km north of the city centre, and rates may already be noticeably lower than in the centre. It has hostels offering single and double rooms at moderate prices.
It suits travellers who want to be near the centre without staying in it, and who prefer a neighbourhood where restaurants cater to locals rather than tourists.
6. Salamanca
Salamanca is the posh district, and most of Madrid's plush hotels are found here. A stay in this tier starts at the higher end of the price range and there is no upper limit.
It suits visitors who prioritise quiet, upscale surroundings and are happy to travel to the sights rather than stay beside them.
7. Gran Vía and Retiro
The Gran Vía and the Retiro area both appear among the locations for plush hotels, alongside the historic centre and the Paseo del Arte.
These are good bases if you want a central or park-side setting at the top of the market, with the Retiro putting you next to the Buen Retiro Park.
8. Lavapiés and Plaza de España
Cheap hostels with dorm beds can be found near Plaza de España and in Lavapiés, making these the most affordable entry points for solo travellers and backpackers.
They suit budget travellers who accept simpler accommodation in exchange for the lowest rates, and who are comfortable in lively, central neighbourhoods.
Where to stay on a budget, mid-range or splurge
- Budget: Cheap hostels with dorm beds, plus budget hotels and B&Bs charging lower rates for single and double rooms. Found in the Sol area, Lavapiés, near Plaza de España, in the Barrio de las Letras and in Chueca.
- Mid-range: Mid-range hotels, concentrated in the Barrio de las Letras, the Sol area and the Paseo del Arte.
- Splurge: Plush hotels with no upper price limit, mostly in the Salamanca district, along the Gran Vía, in the historic centre and in the Retiro and Paseo del Arte area.
- Apartments: For families or small groups, apartments rented through sharing platforms are usually in residential neighbourhoods and include a kitchen, so you can shop at markets, supermarkets or alimentación stores and prepare some meals yourself.
Best area for a first visit
Sol and the historic centre is the best base for a first visit, because it puts the Plaza Mayor, the Royal Palace and the main sights within walking distance and offers accommodation across the budget and mid-range tiers. You trade higher rates and more noise for the greatest convenience.
Frequently asked questions
Is it cheaper to stay outside the city centre?
Yes. Malasaña and Chueca are just 1 km north of the city centre and Chamberí is 2 km away, and rates may already be noticeably lower there while you remain close to the sights.
Where can I find cheap hostels in Madrid?
Cheap hostels with dorm beds can be found near Plaza de España, in Lavapiés and in the Sol area. More comfortable hostels offering single and double rooms can be found in Malasaña and the barrio de las Austrias.
Where are Madrid's mid-range hotels concentrated?
Most mid-range hotels are concentrated in the Barrio de las Letras and the Sol area, as well as the Paseo del Arte.
Where should I stay if I want an upmarket hotel?
Most plush hotels are found in the Salamanca district, along the Gran Vía, in the historic centre and in the Retiro and Paseo del Arte area.
Compare live prices for these areas with the booking tools on this page before you decide.