Where to stay in Istanbul: the best neighbourhoods and hotels

This is the Istanbul of the postcards. The Hagia Sophia and the Blue Mosque face each other across a leafy square, Topkapı Palace sprawls over the tip of the peninsula, and the Basilica Cistern hides beneath the streets. The Grand Bazaar is a short walk west, and the tram runs down to the Galata Bridge and across to Karaköy.

Hotels come in every flavour: a luxury hotel styled with Ottoman furnishings, hand-made carpets, a spa and indoor pool; a five-star within 100 metres of the Hagia Sophia; and smaller, characterful places on the side streets, some with rooftop terraces looking out over the domes. Neighbouring Sirkeci, by the old railway station and the Spice Bazaar, has good-value hotels a short walk from the sights.

The catch? It is touristy, the carpet sellers are persistent and the streets go quiet after dinner, so night owls end up taking taxis across the bridge. For first-timers on a short break who want to see the great sights at opening time, it's still the obvious choice.

West of Sultanahmet, the historic peninsula gets more workaday and much better value. Laleli and Beyazıt are a hive of wholesale shops and hotels around the Grand Bazaar, with trams and the metro on the doorstep. It is noisy and not pretty, but the big sights are a short walk or a couple of tram stops away.

Expect solid four-stars, some with real perks: a boutique hotel near the old city gates, a modern hotel with a rooftop pool and city views, and a spa hotel 400 metres from the Grand Bazaar. Up the Golden Horn, a five-star in the old palace gardens of Blachernae is handy for colourful Balat and the Chora mosaics.

Cross the Galata Bridge and the mood changes. Galata's steep lanes climb to its medieval stone tower, past record shops, wine bars and design boutiques, and below, Karaköy's old warehouses have become cafés, galleries and fish restaurants. Galataport, a reborn waterfront, brings a promenade to the Bosphorus shore.

Hotels here are some of the city's most stylish. The Peninsula Istanbul occupies restored historic buildings on the Galataport waterfront, an MGallery hotel fills an 1836 merchant's han, and a private members' club with a rooftop pool also welcomes hotel guests. On the Golden Horn, a 600-year-old Ottoman shipyard has become a resort-style hotel with an infinity pool. This is the place for couples and anyone who'd rather walk to dinner than to a museum.

Taksim Square is the modern city's crossroads, with metro and funicular links in every direction and İstiklal Avenue running from it down towards Galata, a mile-long river of shoppers, buskers and the little red heritage tram. Side streets are packed with bars, music venues and meyhanes, the classic Istanbul taverns of mezes and rakı.

This is big-hotel territory: a renovated five-star on the square with a rooftop terrace and jacuzzis, a five-star a few minutes' walk away with a top-floor restaurant looking over the Bosphorus, and large international hotels, some with Bosphorus views towards Dolmabahçe Palace. It's lively, central and well connected; light sleepers should ask for a high floor.

North of Taksim, Nişantaşı is where Istanbul dresses up. Its leafy streets are lined with fashion boutiques, patisseries and pavement cafés full of well-heeled locals, and the neighbourhood feels calm and grown-up after the bustle of İstiklal. Beyond it, Bomonti has turned an old brewery into a buzzing food and arts hub.

The jewel is the Park Hyatt in the Maçka Palas, a 1922 Art Deco building in the middle of Nişantaşı. Close by you'll find a Westin, a smart boutique hotel above a French patisserie, and a design hotel near Osmanbey metro, ten minutes' walk from Taksim. Taxis and the metro make the Old City an easy hop.

The Bosphorus is Istanbul's grand boulevard, a busy strait lined with Ottoman palaces, waterside mansions and fish restaurants. Beşiktaş, just north of Taksim, is its most convenient stretch, home to the gilded Dolmabahçe Palace, a lively market district and ferry piers with boats across to Asia.

The city's most famous luxury hotels gather here. The Çırağan Palace Kempinski occupies a former Ottoman palace right on the water, with an infinity pool at the strait's edge. The Swissôtel sits in 65 acres of historic gardens, the Conrad looks down on Dolmabahçe a few minutes' walk from the ferries, and the Hilton Istanbul Bosphorus, set in lush gardens, is a short walk from Nişantaşı. Book a Bosphorus-view room; it's the whole point.

A 20-minute ferry ride from Eminönü or Karaköy lands you in Kadıköy, the Asian side's lively heart. Its market streets are crammed with fishmongers, spice stalls and the city's best casual restaurants, and the neighbourhood of Moda, just south, has seaside tea gardens and a relaxed, artsy crowd. Few tourists stay over, which is exactly the appeal.

Choose a DoubleTree in the heart of Moda, the first Hilton hotel on the Asian side, or a newer five-star beside Kalamış Marina with views over the Sea of Marmara. It's the place for second-timers, and handy for Sabiha Gökçen airport.

An hour or so by ferry from the city, the Princes' Islands feel like another century. Private cars are banned, so you get around by bicycle, electric buggy or on foot, past grand wooden mansions draped in bougainvillea, Greek Orthodox churches and pine-scented hills that run down to little swimming spots. Büyükada is the biggest and busiest.

Hotels are small and personal: a boutique hotel in the heart of Büyükada, a four-star near the ferry square with a seasonal pool and bikes to rent, and a five-star looking back at the Istanbul skyline. Combine a couple of nights here with a city stay.

Istanbul Airport is far out on the city's northern edge, so for a dawn departure or a short stopover it makes sense to sleep beside it. A YOTEL sits inside the terminal building itself, before security, and a Hilton is close to the terminal doors near the metro. For a proper visit, though, stay in town: the centre is a long transfer away.