Old town character
Hotel Simoncini on Rue Notre-Dame is my top pick — a design hotel above a contemporary art gallery, rooms from $170, and you’re 2 minutes from the Palais Grand-Ducal. Hotel Vauban next door is smaller and cheaper ($130) with a similar vibe. Both are family-run and infinitely more interesting than the Sofitel down the street.
Grund and beyond
Hotel Parc Beaux-Arts is technically a mini-hotel — just 11 suites, all in a converted 18th-century townhouse on Rue Sigefroi, from $260. The location is unbeatable, tucked behind the Palais. In Grund, the Stäreplaz guesthouses are small and quirky but book far ahead — there are barely 15 rooms total down there. Skip any 'boutique' claim on Rue de Strasbourg — that's the red-light strip.
Good to know
Do boutique hotels here have pools or spas?+
Rarely — they’re too small. If you want both boutique character and a spa, you’re basically choosing between Le Place d’Armes and nothing.
Are they good for business travel?+
Yes for meetings in Ville Haute, no for Kirchberg (too far). Simoncini and Vauban both have decent workspace and reliable wifi.