Standing directly opposite the Ritz since it opened in 1912, the Palace has always lived in the shadow of its illustrious neighbor. (You can’t help feeling it’s enjoyed having the place to itself during the Ritz’s refurbishment.) The Palace is, by any yardstick, an extremely grand hotel. It was also commissioned and opened by Alfonso XIII, it was Madrid’s building of the year in 1912, and more recently, it got its multi-million-dollar restoration done before the Ritz. Its grandeur is intact, yet a number of 21st-century touches have been added, such as a sushi bar and smooth, taupe-tinted bedrooms. The Palace has also had its fair share of famous guests and scandalous goings-on, all the more so because it never turned away actors and performers, as the Ritz once did. Hemingway, Orson Welles, and Picasso were all regulars; behind glass, you can see a letter containing a poem by Lorca and a sketch by Dalí in which they seek to borrow money for their impecunious friend, the film director Luis Buñuel. Even if you don’t plan to stay here, aim to take a coffee or Sunday brunch in the magnificent stained-glass rotunda.