Where to stay in Budapest: the best neighbourhoods and hotels

The Pest riverfront between the Chain Bridge and the Elizabeth Bridge has the best view in Budapest: the palace and Castle Hill across the water, lit gold at night, with river cruisers gliding past. Trams rattle along the embankment, and the Parliament is a pleasant stroll north.

This is where the big names are. The star is an Art Nouveau palace on Roosevelt Square, transformed into one of Europe's great hotels and facing the Chain Bridge. Next door are large, polished hotels with river-view rooms and summer terraces, and a hotel on the riverbank that spans a neoclassical building from 1847 and a later one from 1895. Book a Danube-view room; it's the whole point.

The streets of Lipótváros, in District V, are Pest at its most handsome: wide, tidy and lined with grand apartment blocks, between the great dome of St Stephen's Basilica and the neo-Gothic Parliament on the river. The square in front of the Basilica is full of restaurant terraces, and the poignant Shoes on the Danube Bank memorial sits on the embankment nearby.

It is the ideal first-timer's base: everything is walkable, Andrássy Avenue and the Jewish Quarter are a few minutes away, and Deák Ferenc tér, where three metro lines meet, is close by. Hotels include a boutique five-star next to the Basilica with a daily wine and cheese reception, a newer five-star named after its famous neighbour, and comfortable four-stars a short stroll from the river.

Belváros is Pest's old inner city, threaded by Váci Street, the long pedestrian shopping street, and anchored at its southern end by the Great Market Hall, where paprika, salami and lángos stalls fill a vast iron-and-glass hall. Side streets hide cafés and wine bars, and the Danube is never more than a few minutes away.

Hotels here have plenty of character. There's a Baroque palace turned luxury hotel near Váci Street, a five-star in an arcade that mixes Moorish, Art Deco and Neo-Gothic styles, a modern boutique hotel on the riverbank with views of the Elizabeth Bridge and Gellért Hill, and a cheerful, good-value lifestyle hotel steps from the Chain Bridge.

Andrássy Avenue is Budapest's Champs-Élysées: a long, tree-lined boulevard of grand 19th-century mansions running from the city centre past the gilded State Opera House to Heroes' Square. Beyond lies City Park, with the zoo, a boating lake that turns into an ice rink in winter, and the yellow palace of the Széchenyi Baths, where locals play chess in the steaming outdoor pools.

It is a great all-round base, and good for families thanks to the park. Hotels range from a design five-star with a rooftop near the Opera to a youthful four-star in a former palace on the avenue itself, a 16-room boutique hideaway just off it, and a theatrical hotel in a 19th-century Freemasons' palace.

District VII is Budapest's most exciting neighbourhood. Its centrepiece is the Dohány Street Synagogue, the largest in Europe, and its streets hold the city's famous ruin bars, where crumbling old buildings and courtyards have been filled with mismatched furniture, fairy lights and a very good time. Kazinczy Street and Király Street are the hubs, with street food, cocktail bars and restaurants open late.

Stay here for nightlife, but choose your street carefully if you value sleep. Hotels include the famous New York Palace on the Grand Boulevard, home to the city's most opulent café, a hotel just 30 metres from the Synagogue, a quiet four-star tucked into the district, and a hotel steps from Király Street that doubles as a winery's showroom.

Buda's Castle Hill is a world apart: a plateau of cobbled streets, pastel houses and medieval courtyards, with the royal palace at one end and Matthias Church and Fisherman's Bastion at the other. By day it fills with tour groups; by night it is hushed, romantic and has the best views of the Parliament across the river.

Hotels are few, which is part of the appeal. One is built around the remains of a 13th-century Dominican monastery beside Fisherman's Bastion; another is a family-run boutique with just 11 rooms and a grill restaurant. Down the hill on the riverbank, a modern hotel looks straight across at the Parliament. It is quieter than Pest, but you'll be walking down the hill and over a bridge for most of your dinners.