24-Hour Room Service: The Hoxton, London

A recent article in The New York Times explored how the collaboration between hotelier Ian Schrager and designer Philippe Starck reinvented the small urban hotel. In it, the design editor of America's House and Garden magazine, Mayer Rus, sniffed that "in 2006, the world is littered with the hell-spawn of that marriage: every city has cheesy boutique hotels that primp and strain to convey their hipness in different, disagreeable ways".

The primping and straining may be true, but Rus misses a crucial point. If it wasn't for the boutique hotel, those of us at the budget end of the scale would still be sleeping on scratchy nylon sheets and lumpy pillows. Instead, the trickle-down effect has meant that even the most mainstream hotels have gone boutique.

Take the Holiday Inn, for example. On a recent overnight stay in one of its Heathrow hotels I got crisp white sheets, a pillow menu, satellite TV and a bright new bathroom, all for £45 for two. I thought back to this when I checked into London's new Hoxton Hotel. This takes the champagne-taste, beer-budget concept to a whole new level. There are no chocolates on the pillow, no minibar (reception sells everything from alcohol to chocolates at normal prices), no in-house gym (for £5 a day, guests can use a local fitness centre) nor jacked-up phone bills (UK phone calls are charged at 3p per minute, US calls at 5p per minute).

What it does have are 205 classy rooms and a bold lobby decorated with quirky furniture, oversized fireplaces and fresh flowers. There's also a breezy central courtyard and a bar (with DJ). The Hoxton Grille is a stand-alone restaurant that specialises in comfort food (Old Spot bangers and mash, potted shrimp, and steak) and serves wine by the carafe as well as by bottle or glass. Also useful for out-of-towners are the private offices: pay £19 and you can have a workspace to yourself from 10am to 4pm. But the really clever thing about the hotel is that it doesn't generate hype that it can't live up to. By selling itself as a budget hotel you get more than you expected, rather than less. Which can't often be said about a Schrager-Starck hotel.

LOCATION

The Hoxton Hotel, 81 Great Eastern Street, London EC2 (020-7550 1000; www.hoxtonhotels.com). Within walking distance of Old Street and Liverpool Street stations, it's surrounded by bars, restaurants, shops and markets (many marked on a free, fold-out map).

Time to international airport: the closest is Stansted, around an hour away by bus (£12.50 return) or 45 minutes by train (£25 return) from Liverpool Street.

COMFORTABLE?

Functional rather than all-out stylish, rooms have a Malmaison feel to them, with lots of plummy brown furnishings. All are doubles or twins, and have swanky shower rooms and Frette sheets. What's more, because the co-founder of Pret a Manger Sinclair Beecham is behind it, a mini Pret breakfast of yoghurt, juice and banana is left on a hook by the door each morning, Christmas stocking-style (larger breakfasts can be had in the restaurant). One thing missing is window blinds - important, given how clearly you can see into other rooms.

Freebies: mineral water, fresh milk for coffee and tea, Pears soap.

Keeping in touch: all rooms have free Wi-Fi, flat-screen TVs and telephones. Unlimited movie hire costs £5 a day.

THE BOTTOM LINE

Rooms start from £59 at weekends and £119 Monday to Thursday, including breakfast. Like no-frills airlines, the earlier you book, the cheaper the price.

I'm not paying that: London St Paul's Youth Hostel, at 36 Carter Lane, starts from £25.50 for a dorm bed (0870 770 5764; www.yha.org.uk).