As sunlight streamed in through the ornate bedroom door of my casa particular (homestay) in Trinidad, I imagined that I'd been transported in a Tardis back to another century. Reclining in my antique bed, I could hear horses' hooves trotting down cobbled car-free streets and the cries of a morning baker calling out "el pan" as he pushed his bicycle from door to door selling bread.
After gazing dreamily at the high wood-beamed ceiling of my impressive colonial digs for several minutes and deducing that I was more of a tourist than a time-traveller, I reached over to the smartphone on my bedside table to check the date. It was 2013. The clock was ticking down to Trinidad's 500th anniversary and I suddenly became aware that I needed to get outside to see how this Unesco-listed town was regenerating for its big birthday.
Change has been gradual in Trinidad, a place where not much has altered for 150 years. Established by Diego Velázquez in 1514 just inland from the central-southern coast as the third of Cuba's seven original "villas" (colonial cities), Trinidad is one of the oldest European-founded settlements in the Americas.
The splendour you see today was built largely on fortunes amassed during a sugar boom in the early 19th century, when the town's wealthy Spanish merchants invested their riches in opulent mansions greedily stuffed with British china and French-Italian furniture.
When the bottom fell out of the sugar industry in the 1860s, Trinidad's streets and buildings fell into post-traumatic hibernation until the Cuban government declared it a national monument in 1978, ushering in a long process of restoration. Protected since 1988 by Unesco for its outstanding examples of 18th- and 19th-century colonial architecture – large single-storey houses sporting terracotta-tiled roofs and pretty Moorish-style courtyards – and off-limits to large-scale development due to Cuba's peculiar political situation, the town still harbours the spectral essence of a Spaghetti Western.
However, the spur of the 500th anniversary, coupled with an economic liberalisation process started by the Cuban government in 2011 means that, to regular visitors like me, Trinidad has changed, even if, superficially, it looks the same.
Walking the cobbled streets, the first thing I noticed was the abundance of new privately owned restaurants and bars. Until 2011, there were only three paladares (private independent restaurants) in Trinidad; now, close to 50 new private dining rooms have opened in handsome historic buildings. Thanks to less stringent rules on what restaurateurs can sell, menus have expanded too. Gastronomy was once Cuba's Achilles heel, but in a pretty rooftop restaurant with mountain views called Vista Gourmet, I found myself being entertained by a multi-skilled waiter who crooned Benny Moré songs, performed card tricks, and never let my wine glass go empty.
Judging by the lobster I ordered – lightly seasoned and fresh off the grill – the chef was equally talented. Led by owner, Bolo, an expert sommelier, Vista Gourmet showcased its Cuban-fusion dishes at a culinary festival that was part of Trinidad's quincentennial celebrations in January.
Food wasn't the only unexpected improvement. Cuba's abundant casa particulares, once restricted to letting out just two rooms, can now rent multiple beds. Released from their economic confines, many proprietors have started turning their elegant colonial homes into guesthouses.
Others have acquired licences to set up second businesses. The owner of the casa where I was staying, Julio Muñoz, has opened an equestrian centre on the edge of town where he organises riding excursions and demonstrates horse whispering. Julio is also a talented photographer who arranges photography courses. An exhibition of his photos of Trinidadian life is currently displayed in the town's Benito Ortiz Art Gallery.
The government-run hotels are also improving. For a glimpse of the latest venture, I climbed a small hill behind the town called Cerro del Vigía, where the 52-bedroom Hotel Pansea Trinidad is soon to open next to the preserved ruins of an old hermitage called Candelaria de la Popa.
From the busy construction site, I looked down upon the somnolent town. In the colonial core, meticulous work was going on to restore three existing museums: the emblematic Museo Romántico, the San Francisco de Asís convent and a half-forgotten archaeological museum that has lain dormant for a decade. Two new museums have just joined the ensemble. A deftly carved scale model of Trinidad's historic town centre is on display in the historic Casa Frías, a 19th-century former family home; while nearby, the renovated late 18th-century frescoed Casa Malibran is now home to an exhibition – and study – centre.
But it was the local Trinidadians who really caught my eye. Intensely proud of their town, they have spent the last year painting house-fronts, sprucing up squares and using their new economic freedom to showcase their talents and push their hometown belatedly into the 21st century while carefully keeping its historical integrity intact. So, 2014 could be Trinidad's year in more ways than one.
Virgin Atlantic (0844 209 7777; virgin-atlantic.com) flies from Gatwick to Havana twice a week from around £720 return.
Viazul buses connect Havana with Trinidad three times a day with a journey time of five to six hours. Tickets CUC$25 (£15).