Don’t get scared off by the name of the Motel One Dresden Am Zwinger (from $93), part of a German chain—“great design for little money” is their slogan—that’s leading the European trend of budget boutique hotels. Opened earlier this year in the city center, the turquoise-accented property features small rooms that don’t feel tight thanks to smart layouts and a minimal amount of furniture. Ask for a room on the third or fifth floor for the best views of the Zwinger Palace.
Experience the bustling Neustadt (New Town) neighborhood from a quiet distance at the handsome, three-year-old Bülow Palais (from $183), located on a refined street dotted with Baroque townhouses. You’ll find antique-style wooden writing desks and rich reds and golds in its 58 rooms, as well as in the Palais Bar, where you can start Friday and Saturday evenings with live piano music at 9 p.m. before walking to bars in the lively heart of the Outer Neustadt.
Sleep inside a renovated palace at the Hotel Taschenbergpalais Kempinski (from $230), the former home of a royal mistress, which was destroyed during the World War II bombings that devastated Dresden. Rebuilt to its original grandeur, it now houses studio-apartment-sized rooms featuring modern interiors that contrast with the Baroque façade, plus prize-worthy views of the surrounding historic city center. In the winter, the interior courtyard is transformed into an ice-skating rink (free for guests).