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Barcelona has a reputation for being Spain's hippest city. Lately, however, things are looking up for Madrid. It recently made a bid for the 2012 Olympics, but even if it doesn't get the nod (the decision was still pending at presstime) it hardly matters. Spain's conservative, if a little sleepy, financial hub has seen a flood of fresh investments, and with it has come newfound energy. By early next year, a Richard Rogers-designed terminal will debut at Madrid-Barajas International Airport. In 2007 a sophisticated railway will link Barcelona and Madrid with one of the world's speediest commercial trains, going 220 miles per hour (as confident a statement as the city could make, given the bombs that ripped through four commuter trains last March). The fast-paced spirit is contagious. "Madrid is opening up while Barcelona is limiting her possibilities," says Alonso Alvarez de Toledo, co-owner of Made for Spain, a Madrid-based bespoke tour specialist ( Sergi Arola, one of the country's top young chefs, identifies the same shift. "Barcelona can't grow because it is trapped between the mountains and the sea," he explains. "But Madrid is in the middle of the plains. Right now it has more opportunity than any other European city."

Madrid has certainly learned from its neighbors, particularly from their architectural love affairs. As Bilbao has Gehry and Valencia has Calatrava, Madrid is now courting its own roster of crowd-pleasers. Rafael Moneo is at work on a controversial cube for the Prado Museum, and this summer Jean Nouvel will complete his addition—an exhibition space with a restaurant for Arola—to the 18th-century hospital housing the Reina Sofía Museum. Last summer the Thyssen-Bornemisza Museum unveiled a fabulous new light-filled wing for some 300 paintings (Picassos, Fragonards, Corots) belonging to Baroness Carmen Thyssen-Bornemisza. Together the three museums carry enough major works to make even Paris green.

This flurry of experimental building has spilled over to the hotels, too (but not, unfortunately, to the Ritz, which desperately needs a makeover, given its magnificent public areas and location). The best of the new design-conscious bunch are the Hotel AC Palacio del Retiro—get room 201, 210, or 211—and the Hotel Urban, with an ultracool glass-and-gold restaurant and a great outdoor pool (the soundproofing in the rooms needs work, though). The address we are most excited about is the Hotel de las Letras, opening this fall. The stunning sixth-floor duplex and coveted location makes it a better choice than the much-heralded Hotel Puerta América. Its arrival is admittedly an architectural pantheon—each floor is designed by a modern master such as Zaha Hadid, Marc Newson, Norman Foster, or David Chipperfield. We just wish the place wasn't right next to a busy highway, 15 minutes from the city center.

As the look of Madrid brightens, so does its taste in food. "Only recently did contemporary Spanish cuisine start gaining recognition," says Arola, whose restaurant La Broche remains the city's hottest. "We always had the product, the tradition, the technique. Now there is the energy." Arola admits the capital of Spanish gastronomy is still San Sebastián, but he has seen haute cuisine—from both near and far—gain momentum in Madrid. There's Galician at Orixe and seasonal dishes from Navarra at La Manduca de Azagra (try the fried white asparagus and artichoke). There is also remarkably good Chinese food at Yuan and fine Indian cooking at Mumbai Massala. At Medina de Braganza, trendy Moroccan draws an equally trendy crowd.

Madrid is clearly feeling fashionable again. Stylish boutiques, such as the women's clothing store Oliphant, spring up almost daily near Chueca, the neighborhood centered around Calle del Piamonte (pop in for coffee at La Maison Blanche) and along nearby Calle Blanca de Navarra, where La Vaquería is the hopping new spot for tapas. At Calle de Serrano, Madrid's Madison Avenue, Agatha Ruiz de la Prada opened a cotton-candy dream of a store to show her women's line; this season it's all pinks, limes, and oranges. For sherbety colors in younger cuts, head to Jocomomola on Callejón de Jorge Juan. Be sure to slip next door to see Sybilla Casa's summery collection of housewares. The colorful china and linens are a perfect foil for the old-world finds at Mur: Spanish altarpieces, 18th-century engravings, and impressive ceramics. Travel light. The shops of Madrid, like the city itself, are overflowing with treasures.

Address Book

HOTEL AC PALACIO DEL RETIRO Rates, $390-$1,120. 14 Alfonso XII; 34-91/523-7460;

HOTEL PUERTA AMERICA $ Rates, $250-$1,900. 41 Avda. de América; 34-902/363-600;

HOTEL URBAN Rates, $240-$880. 34 Carrera de San Jerónimo; 34-91/787-7770;

LA MANDUCA DE AZAGRA Dinner, $120. 14 Calle de Sagasta; 34-91/591-0112

MEDINA DE BRAGANZA Dinner, $100. 8 Calle de Bárbara de Braganza; 34-91/185-3956

MUMBAI MASSALA Dinner, $85. 14 Calle de Recoletos; 34-91/435-7194

ORIXE Dinner, $100. 17 Calle de la Cava Baja; 34-91/354-0411

RESTAURANTE LA BROCHE Dinner, $190. 29-31 Calle de Miguel Angel; 34-91/399-3437;

YUAN Dinner, $110. 87 Calle de Velázquez; 34-91/576-6692

AGATHA RUIZ DE LA PRADA 27 Calle de Serrano; 34-91/319-0501

JOCOMOMOLA 12 Callejón de Jorge Juan; 34-91/575-0005

MUR $ 19 Calle de Argensola; 34-91/448-7441

OLIPHANT $ 7 Calle de Santa Teresa; 34-91/319-3594

SYBILLA 12 Callejón de Jorge Juan; 34-91/578-1322

Member of Fine Dining.


Insider Tips

Book a table at LA TERRAZA, where chef Paco Roncero serves culinary inventions overseen by the master of contemporary Spanish cuisine, Ferran Adrià. Dinner, $250. At 15 Calle de Alcalá; 34-91/532-1275.

Catalan-born chef PILAR LATORRE opens up her home in downtown Madrid for private cooking lessons. The Catalan crème brûlée alone is worth a visit. Book through Cellar Tours, 34-91/521-3939;

Take home some avant-garde chocolates (with, say, Parmesan or anchovies) from CACAO SAMPAKA (4 Calle de Orellana; 34-91/319-5840) or the so-called Galician tit cheese from PONCELET (27 Calle de Argensola; 34-91/308-0221).

One of the few Goyas not held by a museum is at the ERMITA DE SAN ANTONIO DE LA FLORIDA, the artist's burial site. 5 Glorieta de San Antonio de la Florida.

The new fashion museum, MUSEO DEL TRAJE, profiles some of the nation's great designers (Balenciaga, Pedro Rodríguez, Manuel Pertegaz). 2 Avda. de Juan de Herrera; 34-91/549-7150.


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