The jet set always favoured this island hideaway. Now you can visit too, says Sarah Gilbert

Sailing into Spetses harbour, the silhouette of the Poseidonion Grace dominates the skyline. Built by a Greek tobacco tycoon in 1914 in the style of the Côte d'Azur's grandes dames, it soon became a draw for high society, royalty and wealthy Athenians.

After falling into elegant disrepair, the latest venture from Grace Hotels Group, in conjunction with the Vordonis family, has reopened after a sensitive restoration. The marble frontage and its wrought-iron balconies are unchanged, while inside, the light and airy lobby, restaurant, and bar juxtapose original features – including a sweeping marble staircase, ornate ceilings and tiled floors – with contemporary furniture, sleek chaise longues and squishy sofas.

At the rear of the hotel sits the unobtrusive new wing, a turquoise asymmetric pool is surrounded by towering palms and tubs of sweet-scented jasmine, while pink bougainvilleas entwine the buttermilk façade.

When package tourists deserted Spetses in the early 1990s in favour of Greek islands with airports – this island is even blissfully car-free – the Athenian jet set, including the world's richest ship owners, moved in. Sipping a cocktail on the Poseidonian's terrace overlooking the Aegean and the Peloponnese coast beyond, you can almost imagine that one of the mega-yachts lining the harbour is yours.

The rooms

The 52 rooms – 17 of which are in a new wing – range from deluxe with a garden or sea view, interconnecting rooms ideal for families, to the Grace Suite, with three double bedrooms, each with an en-suite bathroom and an enormous terrace. All are cool, calm and sophisticated. Sea-view rooms are decorated in muted tones of off-white and sea-mist grey – a perfect contrast to the startlingly blue sea – with pine floors, dark-wood furniture, flatscreen TV and small balcony. Toiletries in the white tiled and marble bathrooms – most don't have baths – are by the Italian designer Etro.

The food and drink

After breakfast – an expansive champagne buffet – the bar and brasserie takes over, serving light meals until late. In this former library, one wall is lined with books, the other with electric-blue chairs. The formal restaurant, Aneton, has white linen-clad tables that spill out on to the terrace during the summer months. The menu – created by chef Vasilis Kallides, from the Athenian restaurant of the same name – is contemporary Greek: octopus fried in pepper sauce, chickpea croquettes with white tarama dip, catch of the day served with steamed greens from the hotel's organic garden. Try the signature Grace cocktail, a refreshing blend of vodka, pear purée, honey and fresh lemongrass. For three courses expect to pay about €50 (£41) a head without drinks.

The extras

The hotel is home to the island's only dedicated spa, where the Greek Orange Bliss treatment is balm for sun-frazzled skin. There's no concierge but the front desk can arrange bike and moped hire or boat tours of the island. There's a small business centre and free Wi-Fi throughout the hotel, as well as a fully equipped conference centre.

The access

There are two rooms with access for guests with disabilities on the ground floor of the new wing. Children are welcome. No pets.

The bill

Double rooms start at €195 (£162) per night for a deluxe garden view, to €1,800 (£1,498) for the Grace Suite in low season, including breakfast.

The address

Poseidonion Grace, Dapia, Spetses, Greece (00 30 22980 74553;