That elusive, smart and affordable hotel is only just around the corner - if you know where to look

There is no reason why we cannot find beautiful places to stay and eat without causing a financial haemorrhage but usually such places are kept closely guarded secrets. Overheard snippets can be very rewarding. When travelling, I've found that simply by listening to the right conversations you can pick up ideas that open up a world of exquisite houses, tiny hotels and unique restaurants: places that are affordable, where you don't have to make do with darting into grand hotel lobbies in a nervous hunt for rich folks' loos.

There is a house where the giant swags of red velvet curtain in the hall came originally from the Doge's Palace in Venice, the rooms are panelled with Burmese teak, the recipe for muffins comes from Mrs Beeton's Cook Book and the current owner's accent is delicate north India meets BBC newscaster circa 1950. The Raja of Karputhala bought the Viceroy's Secretary's house, Simla, North India, in 1938 and the clock stopped then. Reggie, the current owner, is the Raja's grandson and he has made Chapslee House a microcosm of a gentler time.

In 1996, nothing at Chapslee House indicates that Rudyard Kipling's rabbit warren bazaars do not throb and buzz just out of earshot. No one else was staying when I was there; I sat in solitary splendour on the terrace, my tea served in Limoges china accompanied by Mrs Beeton's muffins. I sipped contentedly looking out over the foothills of the Himalayas. Indoors a houseboy was on standby next to the bridge table just in case a playing four, requesting gin fizzes, suddenly materialised from a pocket of the past. His cap and white gloves were perfect whether he was delivering the bed tea at 8am or bringing me a china hot water bottle just before midnight.

Chapslee is rare but not unique. Up on a hill beyond the smog of downtown Istanbul perches the Pera Palace. Little has changed since it was built as an attempt to soften the blow of arriving in Istanbul for travellers from the Orient Express. A delicate blanket of gentility has settled over the hotel where Agatha Christie famously lost 11 days of her life in room 411. Silver and crystal still shimmer and clink as the old world takes tea regardless of terrorist action elsewhere in the city.

Equally romantic and cocooned in the past is the Old Winter Palace Hotel in Luxor. Its setting is dreamy - you gaze out over the Nile - and its elegance seems to flow from its old-fashioned features of carriage drive and swooping staircase. Every evening I sat in the garden under an oleander tree and looked out over the Nile to the Theban Mountain. As in Istanbul, the attitude of the national extremist terrorist groups means that life for tourists is not totally secure but, there are plus points in that this does give good bargaining power.

Sometimes it is better to start this value for money charm hunt closer to home. I found Wesley House on a desperate search on a dark and windy night. I was simply looking for somewhere cheap and cheerful to stay when I came across this gem. It sits plumb in the middle of the honeycomb- cottage belt of corpulent Gloucestershire. Every sheep baahs on cue and every blackberry is just so at plucking time. The comfort, food and attention to whim are faultless. Here plump sofas meet herbaceous border, the marinated olives are better than in Positano and the country walking is a straight take on a wander through a rural idyll.

However if, for some reason, the sound of these places fails to appeal, make sure you listen to your fellow passengers next time you're on a bus or train. You never know what secret hotels you may discover.

Chapslee House, Simla can be booked direct on 00 91 177 202 542 or through Distant Frontiers in Delhi (00 91 11 685 8857); Pera Palace, Mesrutiyet Cadessi 98/100, Harbiye, Istanbul (00 90 1 251 4560); The Old Winter Palace Hotel, Sharia el Nil, Luxor (00 20 95 580422); Wesley House, High Street, Winchombe (01242 602366).

Justine Hardy's book, The Ochre Palace (Constable) appears in paperback in July.

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