If there's a barometer to measure Lisbon's rise in the rankings of hip European cities, it's the hilly Bairro Alto neighborhood. The narrow cobblestoned lanes lined with bright yellow 18th-century buildings have for decades drawn the Portuguese capital's intelligentsia to their busy cafés; today a young, fashionable crowd flocks to the edgy boutiques and hopping bars. And as in the rest of the city center, the 200-year-old street plan has been miraculously preserved—rare even by European standards—and with it the old-world charm. The only thing missing was a chic little place to stay.
Which is why the Bairro Alto hotel, right in the middle of this epicenter of cool, on one of the liveliest squares, is such big news. Opened by Grace Leo-Andrieu, the ineffably chic proprietor of The Lancaster and the Bel Ami in Paris, Bairro Alto is the antidote to most other hotels in town, which are staid, drearily modern, out of the way, or all three. It has 55 rooms, an intime terrace overlooking terra-cotta roofs and the Tagus River, as well as a restaurant helmed by Henrique Sá Pessoa, who trained at Nobu London. The three-level bar, a slightly perilous prospect for any boutique property, was not yet finished on our visit. As home to the resident deejay, though, it's bound to make the hotel a happening spot, for better or worse.
Despite being in the thick of things, Bairro Alto maintains a certain hush. Most of the rooms, decorated in the saffron, blue, ocher, and ivory of the surrounding landscape, look out onto the square. Day and night, parents push strollers around the statue of the poet Camões, and local youth make their way to the boutiques and after-hours boîtes—the action is always visible but mercifully soundproofed. In the suites, at the corners of the building, the bathrooms face a classic Lisbon image: the azure ceramic tiles of a nearby church.
Throughout the rest of the hotel, Mediterranean influences come in subtle touches. The dining room's rococo tables mix smartly with contemporary photos and Moroccan tile work. Terrazzo, used to keep hot-weather houses from overheating, covers the entire ground floor. An airy coolness dominates the lobby, a sparse foyer facing a tiny gold-lined elevator. This left us puzzled until we discovered the reception desk, hidden behind white arches and manned by a young, helpful staff. From $290 to $670. At 8 Praça Luis de Camões; 351-21/340-8288; www.bairroaltohotel.com.