Five Best: Factory hotels

Room Mate Alicia, Spain

When the Alicia opened last spring in Madrid's historic Las Letras district, she joined her siblings – Mario, Laura and Oscar – in making up the capital's Room Mate family. The concept is simple: each hotel is affordable, centrally located, and guests should feel like they are staying with a friend. Alicia is the place to stay for soaking up some serious culture. Housed in an early 20th-century shoe factory, it has 34 bright, contemporary bedrooms overlooking the Plaza Santa Ana, and is a stroll away from the Prado and Reina Sofía.

Room Mate Alicia, Calle Prado 2, Madrid, Spain (00 34 91 389 6095; www.room-matehotels.com). Doubles start at ¿96 (£69), including breakfast.

Bratsera Hotel, Greece

Situated on the idyllic, car-free island of Hydra, the Bratsera began life in 1860 as a sponge factory, cleaning and pressing sponge from the Mediterranean for shipping. But as plastic became cheaper, the industry went into decline, and current proprietor Christine Davros decided to diversify into hospitality. After an extensive renovation, the Bratsera emerged as a chic boutique hotel, with 28 individually designed rooms, an outdoor pool and a wisteria-draped courtyard restaurant serving Greek cuisine. Architect Dimitris Papaharalambous has retained the factory's original, earthy character – floors are stripped pine, walls are exposed stone, doors made from packing crates, and nautical memorabilia is dotted throughout.

Brasera Hotel, Hydra, Greece (00 30 2 980 53 971; www.bratserahotel.com). Doubles start at €132 (£94), including breakfast.

Nhow Hotel, Italy

The work of designer Matteo Thun and architect Daniele Beretta, the Nhow Hotel has come a long way from its beginnings as the General Electric powerplant on Milan's Via Tortona. Built in 1935 and restored last year, the hotel is in the heart of the trendy "Zona Tortona" – the canal-side district that was once a centre of heavy industry and is now an artists' quarter, home to studios, galleries, bars and shops. The hotel's contemporary urban decor has serious wow factor – think graffitied doors, steel girders, long tunnels, experimental art – and its first-floor gallery, bar, restaurant and terrace are regularly used for photo shoots and fashion shows.

Nhow Hotel, Via Tortona 35, Milan, Italy (00 39 02 489 8861; www.nh-hotels.com). Doubles start at €147 (£105), including breakfast.

Tea Factory Hotel, Sri Lanka

Rising out of the mist on a hilltop in Sri Lanka's highlands, the imposing Tea Factory Hotel once produced some of the finest pure Ceylon tea in the world. Built during the British Raj in the 1930s, it was later rescued from dereliction in 1992 and converted into a luxury hotel. The 57 colonial-style rooms are housed in the old withering lofts, with views over the tea hills; a bar occupies the one-time packing area; a restored railway carriage is now a restaurant. Original pieces of machinery adorn the public spaces, and the hotel has a small factory and museum, where guests can pick and dry leaves to take home.

Tea Factory Hotel, Kandapola, Nuwara Eliya, Sri Lanka (00 94 11 230 8408; www.aitkenspencehotels.com). Doubles start at US$70 (£35), including breakfast

Henry Jones Art Hotel, Australia

One of Tasmania's most famous residents, the entrepreneurial Henry Jones went from label-paster to head of his own jam-making empire – and the largest private company in the world at the time. His IXL jam works – a row of Georgian buildings lining Hobart's waterfront – now comprise an award-winning hotel, bar and restaurant, as well as a regularly changing display of more than 250 works of art. Designed by local architect Robert Morris-Nunn, the 50 open-plan rooms are gritty and modern, echoing Hobart's colonial trading links with Indo-China (ottomans and silk eiderdowns) as well as the factory's past (exposed brickwork, refurbished machinery and wood panelling).

The Henry Jones Art Hotel, 25 Hunter Street, Hobart, Tasmania, Australia (00 3 6210 7700; www.thehenryjones.com). Doubles start at A$272 (£111), room only.