Last Updated: December 22, 2021

Where To Stay In Madrid?

Traveling to Madrid and not sure where you should stay in the city? Then you’re definitely in the right place because this Madrid neighborhood guide covers all you need to know about the best places to stay in the Spanish capital!

From the charming streets of Argüelles to the luxury hotels in Salamanca, this detailed guide includes everything you need to know about the best neighborhoods in Madrid. We’ve covered the best hotels, restaurants, and top things to do in the city, so there’s something for everyone!

Madrid Layout & Where To Stay

Madrid Spain

The layout of Madrid is kind of similar to the layout of Paris, in that it can be a bit confusing for first-time visitors. The city is divided into main neighborhoods, which are then further divided into barrios. However, barrios can refer to both the administrative districts and historic neighborhoods, which sometimes overlap with each other.

Perhaps the best example is the Centro neighborhood of the Spanish capital, which is the best place to stay in Madrid for first-time visitors. Centro is divided into several administrative districts and historic neighborhoods that overlap.

One of the districts here is Embajadores, which encompasses most of the historic neighborhood of Lavapies and part of La Latina. But Lavapies is not entirely in the Embajadores district, and neither is La Latina.

Madrid Plaza Mayor

It can be a bit confusing, but it’s not something you should dwell on too much – Madrid is extremely well connected with public transport, and no matter where you stay you will be able to get around the city quickly and easily.

The center of Madrid is the best place to stay for visitors who want to be within walking distance of all the city’s most famous attractions.

Those who wish to be away from the busiest streets should look into accommodation in the residential areas of El Retiro, Chamberi, and Moncloa-Aravaca districts. Anyway, read on to see Madrid’s best neighborhoods, and find the one that’s just perfect for you!


Madrid Malasana

Malasana is one of the best neighborhoods to stay in Madrid, especially if you’re looking for more affordable accommodation options like hostels and private rooms. This is a student-friendly neighborhood, so it’s one of the cheaper parts of Madrid, making it a great location in Madrid for travelers on a tighter budget.

This Madrid neighborhood is north of Gran Via and Plaza Mayor, and it’s easy walking distance from the city’s most famous attractions. Also, there are several metro stations within Malasana, so you will have easy access to public transport.

On top of that, it’s worth noting that Malasana is home to some of Madrid’s best bakeries and trendy cafes, as well as a plethora of vintage clothing shops. If the shops along Gran Via aren’t exactly to your taste, you should definitely go for a stroll around this neighborhood to check out some other options.

Madrid Malasana Cafes

In addition to being home to some of Madrid’s best breakfast and brunch spots, Malasana is also known for its vibrant nightlife. It’s home to countless nightclubs, rock clubs, and bars, where you can enjoy drinks while listening to live music and dancing the night away.

This historic barrio is also notable for its popular tourist attractions, the most notable of which is Plaza del Dos de Mayo. The bustling city square is famous for the large monument dedicated to the 1808 rebellion, but also for the surrounding cafes and shops.

Other notable attractions in Malasana include Palacio de Liria art museum, Centro de Cultura Contemporánea Condeduque cultural center, San Antonio de los Alemanes church, and many others!

Malasana is abundant with affordable accommodation in the form of hostels and 2-3 star hotels. They’re not exactly known for spacious and modern rooms, but you can expect the rooms to be pretty clean and to have your own private bathroom.

Sol-Gran Via (Puerta del Sol & Gran Vía)

Madrid Plaza del Sol

Sol is the historic city center of Madrid and one of the best neighborhoods to stay in for first-time visitors with limited time in the city. The central location means that all the popular tourist attractions are within walking distance, most notably Plaza Mayor, Puerta del Sol, and the famous Gran Vía street.

This historic neighborhood is also home to museums, countless tapas bars, cafes, and some of the city’s best restaurants. Gran Vía is at the northern border of the barrio – the iconic street is lined with high-street shops, and it’s the best place in the city for anyone who wants to do some shopping.

Additionally, it’s worth noting that Gran Via has its own little barrio, which stretches from Plaza de España to the Gran Via metro station, in between Sol and Malasana. The small barrio is home to some amazing vintage theatres, great restaurants, bars with rooftop terraces, and a plethora of mainstream clothing shops.

Madrid Gran Via

You’ll also find a good selection of hotels and hostels here, but they are pretty expensive. You’ll get much better value for money if you head north to Chamberi or even Malasana since the price of Gran Via hotels is mostly dictated by the exclusivity of the location as opposed to the quality of service.

The wider city center is home to hundreds of hostels, hotels, and AirBnBs so it is possible to find accommodation for different budgets in this lovely neighborhood.

However, it’s important to note that all the accommodation options in Sol are going to be more expensive than in other parts of the city, simply because it’s the most central area of Madrid. Also, the closer you are to Plaza Mayor, the more you should expect to pay for accommodation.

Sol is not a great neighborhood for budget travelers, but it is a good option for people who are looking to stay in a boutique hotel or some of the city’s best mid-range hotels. The First One Boutique Hotel is one of the more popular hotels in this area, and it’s not too expensive considering the fantastic location and quality of service.

Barrio de Las Letras / Huertas

Madrid Barrio de las Letras

Barrio de Las Letras is Madrid’s Literary Quarter that was once home to some of the best 17th-century writers Spain has ever produced. It’s also one of the more budget-friendly neighborhoods in Madrid, with many hostels and affordable rooms for travelers looking for budget accommodation.

This historic district is also the best place for any artists and bookworms who travel to Madrid. With many theatres, museums, and cobbled streets named after famous writers, it’s easily the center of everything culture-related in Madrid.

Plaza Santa Ana is the central square in this neighborhood, but it’s not the key attraction of the district. That would be Huertas street, which is famous for being lined with traditional tapas bars. It’s probably the best place in Madrid for tapas since it offers so many different options. There’s also Lope de Vega street, which features bookstores, fashion shops, and a plethora of tapas bars.

Madrid Tapas Bars

Another notable street in Madrid’s Literary Quarter is Calle de Cervantes. This is where you’ll find the Lope de Vega museum, which is the former house of the famous Spanish playwright. As you might be able to guess, this street also boasts many bars where you can enjoy tapas and drinks.

Gran Hotel Inglés is the best luxury accommodation in this barrio, perfect for all travelers who are looking to be spoiled with elegant rooms, air conditioning, and an on-site gym. Other luxury hotel options in this district include the Four Seasons Madrid, Hotel Urban, ME Madrid Reina Victoria, and many others.

La Latina & Madrid de Los Austrias

Plaza de Cascorro

La Latina is a Madrid barrio that occupies the oldest part of Madrid. It’s known for narrow streets, large squares, and remnants of Islamic architecture. La Latina was Madrid’s first Islamic citadel, so this is one of the historically richest parts of the Spanish capital.

The barrio is home to several historical museums that are perfect for learning more about Madrid’s history, but also to countless bars and rooftop terraces. Other notable landmarks in the district include the San Pedro el Viejo church, Garden of the Prince of Anglona, and the Saint Isidore Museum.

Additionally, there are plenty of theatres throughout this historic district, making it one of the best neighborhoods in Madrid for lovers of performance arts and anyone who want to explore the culture of the Spanish capital.

Madrid El Rastro

La Latina is also famous for the El Rastro flea market. This is the city’s largest flea market and it’s open every Sunday. It was established way back in the Middle Ages, and since then it has attracted countless tourists and locals who are looking to shop for unique items. It’s the perfect place to shop for unique Spanish souvenirs, and it’s a must-visit if you’re planning on doing any shopping while you’re in Madrid.

This neighborhood is often called Madrid de Los Austrias, mostly because of the many Habsburg buildings that are remnants of the Habsburg dynasty. It’s worth noting that Madrid de Los Austrias encompasses a wider area than just the La Latina neighborhood, since even Plaza Mayor which is in the Sol barrio, is architecturally a part of Madrid de Los Austrias.

The hotel options in La Latina are scarce – most hotels are in the southern part of the neighborhood, about a five-minute walk from the La Latina metro station. L & H Latina is the most popular hotel in this district, praised for clean rooms, friendly staff, and a fantastic central location.


Plaza de Espana

Argüelles is a residential neighborhood in Madrid that’s great for visitors who want to stay in a more peaceful part of the city. It stretches north from the Madrid Royal Palace, and it is part of Madrid’s larger Moncloa – Aravaca neighborhood.

Although it isn’t one of the central neighborhoods, it’s still close enough to the heart of Madrid that you can walk to the city center in just some 20 minutes. Argüelles is even closer to the Royal Palace and the Catedral de la Almudena, both of which are famous for their stunning architecture and historical importance.

The most notable Madrid landmark in Argüelles is Plaza de España. This famous city square is best-known for the monument of Miguel de Cervantes, but also for being surrounded by cafes and tapas bars. It’s worth noting that this is more of a park than a traditional city square, and it’s one of the few places in Argüelles that’s often crowded with tourists.

Despite this being a predominantly residential neighborhood, there are quite a few hotels located in this district and even more AirBnBs! Accommodation in Argüelles is generally cheaper than in Madrid’s more central areas, making it a great place to stay if you want to be close to the city center but without spending a fortune on a hotel room.


Madrid Chueca

Chueca is a neighborhood in central Madrid named after the barrio’s central square, Plaza de Chueca. It’s locally known as Madrid’s gay neighborhood, thanks to the many gay bars that are located in this part of the Spanish capital.

Chueca is not a neighborhood just for gays – the many lively bars are inclusive regardless of your sexual preferences, and they’re amazing if you want to have heaps of fun and experience some of the wilder parties in Madrid.

This is one of Madrid’s central neighborhoods that almost never sleeps, and it’s the best place to visit if you’re looking for an open locale in the wee hours of the night. It’s extremely popular with young people, particularly among students, artists, and the LGBTQ+ community.

Madrid Chueca Nightlife

Because this barrio is mostly frequented by young adults, it boasts very affordable prices in its many hotels, bars, and restaurants. It’s home to quite a few hostels and budget hotels, and it’s one of the top places to stay in Madrid if you’re on a tighter budget.

Additionally, there’s a lot to see and do in Chueca, apart from frequenting the gay bars. The Madrid History Museum is situated in this lively barrio, which is famous for its Baroque exterior and excellent exhibit on the history of the Spanish capital.

Museo del Romanticismo is also very popular with visitors. It’s located in an 18th-century mansion, and it boasts quite a few paintings from the romantic period. Even the furniture in this museum is a few centuries old, and it’s pretty amazing just how well preserved everything in the museum is.

Other notable attractions in this colorful barrio include the Mercado San Antón (three-story farmer’s market), the Church of Saint Anton, Plaza del Rey city park, and Museo de Cera.


Madrid Salamanca

Salamanca is a vast neighborhood in Madrid, north of the Retiro and the Centro neighborhoods. It’s home to 19th-century boulevards, designer boutiques, Michelin-starred restaurants, and some amazing art museums. Salamanca is a posh neighborhood in Madrid, so it’s definitely not suitable for travelers on a tighter budget.

Instead, it’s the best option for travelers with deeper pockets, especially those who would rather stay at a luxury hotel than an affordable AirBnB. This Madrid neighborhood is also home to the Golden Mile, which is what the locals call the part of Salamanca that’s lined with designer boutiques that few can afford.

I’m talking Chanel, Tiffany & Co., Hermes, Dior, Cartier, and many other names that are famous in the world of high fashion. But don’t stress – just two streets down from this upscale shopping street, you will find some much more affordable shopping opportunities like Zara, Massimo Dutti, Mango, and others.

Salamanca neighborhood is home to the best luxury hotels in the city, including Wellington Madrid, Bless Hotel Madrid, Rosewood Villa Magna, and many others. They’re known for modern and spacious rooms, and pretty much every hotel in this district has at least one excellent on-site restaurant.


Lavapies Madrid

Lavapies is one of the best neighborhoods to stay in Madrid for budget travelers. It’s still very much in central Madrid, but it’s far enough from the historic city center that the accommodation is generally more affordable in this area.

Plaza Mayor, which is Madrid’s main square and pretty much the most important place for visitors, is just a 10-15 minute walk away from the best hotels in this neighborhood. Likewise, it’s only a 20-minute walk from the southern edge of this neighborhood to Gran Via, which isn’t that bad at all.

Additionally, the metro station at the center of this neighborhood makes it even easier to get around the city. And it’s not the only metro station in Lavapies, so no matter where exactly you stay in the area, you will have easy access to public transport to get to other parts of Madrid.

Reina Sofia Museum

Since Lavapies is also situated in the wider area of Madrid city center, it is home to several popular tourist attractions. The most notable one is the Reina Sofia Museum, which houses an extensive collection of paintings by 20th-century Spanish artists such as Dali, Gris, Miro, and Picasso.

The Lavapies neighborhood is also home to Mercado de San Fernando, which is a very popular marketplace in Madrid. The indoor marketplace is huge, and it features stalls that sell everything from fresh produce to books and clothes. Whatever it is that you need to buy, it’s highly probable that you’ll find it here.

El Retiro

Retiro Park

El Retiro is a neighborhood bordering Madrid’s city center. It’s home to the spectacular El Retiro Park, as well as many other popular Madrid attractions. It’s worth noting that the Retiro neighborhood is comprised of several smaller administrative districts, each of which has something unique to offer to the tourists who opt to spend their time in Madrid there.

El Retiro Park is absolutely huge, featuring wooded walking paths, countless fountains, and even a boating lake. The Retiro park grounds are also home to several monuments and landmarks, as well as a few art museums.

Staying in this neighborhood while you’re in Madrid is a great idea if you prefer to be in a more peaceful area of the city, since it’s nowhere near as busy and crowded with tourists as the more central Madrid barrios are.

Just outside the park grounds, you’ll find a plethora of modern hotels, cafes, and shops. The western part of Retiro is also home to several amazing museums, the most notable of which is is the Prado Museum. Museo del Prado is famous for its collection of 12th-19th century art, including masterpieces by Goya, Velasquez, and El Greco.

Museo del Prado

However, the Prado Museum is just one of the many exciting museums in Retiro. This Madrid neighborhood is also home to the Naval Museum, the National Museum of Anthropology, and many more. Other notable attractions in this vibrant neighborhood include the Puerta de Alcala, Real Jardín Botánico gardens, and the Royal Tapestry Factory.

The hotel options in Retiro are scarce and far apart, but there are many AirBnBs and private apartments! Accommodation is generally affordable in this part of the city, especially in the barrios east of the vast park.

Retiro is also home to a few luxury hotels, which are concentrated in the area around the Prado Museum, west of the Retiro Park. Mandarin Oriental Ritz is the best luxury hotel in the district, and it’s easily the best option if you’re looking for a five-star hotel with premium service.


Madrid Chamberi

Chamberi is a residential neighborhood in Madrid that encompasses several smaller barrios. If you want to experience how the locals live, Chamberi is one of the best places to stay in Madrid. It’s home to countless tapas bars, upscale nightclubs, but also some excellent cultural attractions that are worth checking out even if you’re staying in the center of Madrid.

It’s worth noting that Chamberi is immediately above Malasana, so even if it’s not in the strict center of the city, it’s still pretty close to all the popular tourist attractions. The center of the residential district is a short, 30-minute walk away from Gran Via, and it’s even closer by public transportation.

Chamberi is home to quite a few museums, the most notable of which is the Andén 0 | Estación Museo. This is the Madrid Metro ghost station, which originally opened in 1919 and has been out of use since 1966. Today it is a very popular museum that can be visited only by those who book a guided tour.

Chamberi Ghost Metro Station

Museo Geominero is also popular with tourists, particularly those who are interested in geology. It boasts an extensive collection of minerals, fossils, and rocks in a grand hall with a glass roof and balconies on upper floors.

The Sorolla Museum is also situated in this district. It’s the former home of the famous Spanish painter, and an absolute must for all art lovers who are interested in the works of Joaquín Sorolla.

In terms of accommodation, Chamberi doesn’t offer the best selection of hotels and private apartments. There are some great budget hotels here, as well as a few luxury hotel options, but you’ll find that the selection is much wider in Salamanca or Malasana, both of which border this residential neighborhood.

About the Author Anna Timbrook

Anna is the co-owner of expert world travel and can't wait to share her travel experience with the world. With over 54 countries under her belt she has a lot to write about! Including those insane encounters with black bears in Canada.

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