Built in 1906 by the Gresham Life Assurance Company, the Gresham Palace was designed by Hungarian architect Zsigmond Quittner in opulent Art Nouveau style. Understandably, given its location in pride of place at the tip of the city's landmark Chain Bridge, the building swiftly became one of the city's most fashionable early 20th-century venues. (Another, the New York Café, has been similarly restored and is set to reopen next year).
Unfortunately, politics gradually put paid to the Gresham's glamorous existence. During the siege of Budapest in 1944 the building was badly damaged, and soon afterwards it was commandeered by British and American forces. Then came the Communists and yet another conversion, transforming what remained of a once-sophisticated meeting place into workaday office space for state companies.
The building started to crumble. In 1989, ownership of the Gresham Palace passed to the city and it was reinvented again, this time as social housing. Eventually, in 1998 plans were made to turn the building into a hotel (pictured right).
When it reopened in June this year, a month after Hungary joined the European Union, it was obvious the scheme had been a success.
With its dazzling Art Nouveau decor, the Gresham Palace is once again one of Europe's most glittering buildings - and the city's premier address. Already Sophia Loren has paid a visit and the Prince of Asturias, heir to the Spanish throne, also chose to stay here while on an official visit to the Hungarian capital.
Four Seasons Hotel Gresham Palace, 5-6 Roosevelt ter, Budapest, Hungary (00 36 1411 9000; www.fourseasons.com).
The site, on the eastern (Pest) side of the river is hard to beat, with a sweeping vista across the Danube to historic Buda.
Transport: Buses, trams and trolleybuses all pass within a couple of minutes' stroll of the hotel, though Budapest is a great place to explore on foot.
Time to international airport: around 30 minutes by shared minibus direct from the hotel (3,600 Hungarian forint or about £10 return).
Fittingly, much of the restoration work at the Gresham was carried out by the firms that built it. From the wrought iron peacock gates and brilliant mosaics at the hotel's entrance to the restored glass cupola and elaborate stairways of its interior, life has been pumped back into one of Budapest's most important architectural heirlooms. Although the 179 bedrooms boast the kind of luxury you'd expect of a Four Seasons hotel, in comparison with the building they look almost bland.
It's tempting to spend more time in the hotel's grand communal areas than its guest rooms, listening to a pianist in the lobby, quaffing your way through the vast (and reassuringly Hungarian-heavy) wine list in the elegant Italian-Hungarian restaurant, Pava, or stuffing yourself with gooey cakes in the Gresham café. There's also a small, top-floor health club.
Freebies: newspapers, an extended range of citrus L'Occitane toiletries, and a great overnight shoe cleaning service (leave your shoes by the door at night and they will be returned, shiny and wrapped in tissue paper, the following morning).
Keeping in touch: satellite TV, two phone lines and, for internet access, a choice between a separate data port for modem connection and wireless access.
THE BOTTOM LINE
Double rooms cost from €270 (£192) per night, without breakfast.
I'm not paying that: the Citadella Hotel has basic but attractive rooms in an old fortress at the top of Gellert Hill from €50 (£36), per double, without breakfast (Citadella setany, 00 36 1386 0505).