Here you can sip delicious Hungarian sparkling wine (pezsg . . . look out for those made by Torley), dine on foie gras (Hungary is the world's second-largest producer after France) and spend days in spas and nights at the opera.

And all for a fraction of what you would pay further west.

Or in Moscow, come to that.

In 1867, the Austro-Hungarian emperor Franz Josef declared he wanted to make Budapest a Habsburg capital equal to Vienna, an ambition he achieved. It may not have the glorious palaces, the wealth and order of the Austrian city but neither does it suffer from the same smugness. Budapest has art, music, numerous galleries and a host of museums . . . devoted, among other subjects, to terror, sewerage and the emergency services, as well as Old Masters. And it has at least a couple of truly grand hotels.

The obvious option for luxury is the Four Seasons Gresham Palace by the Chain Bridge on the Pest side of the Danube. The building is a fantastical confection, with luminescent, azure-tiled cupolas and turrets, art nouveau carvings and details in gold mosaic that sparkle in the sunlight.

It was built in 1906 by the London-based Gresham Life Assurance company. The company intended the building to be the grandest edifice on the river, with a shopping arcade, offices and apartments for aristocrats.

In 1952, the building was nationalised and became social housing. Not that you'd know, for its transformation into a hotel in 2004 cost $120m and you can see where the money has been spent. The glass dome over the lobby is glazed with individually moulded opalescent panes.

Its intricate, stained-glass panels and wrought ironwork have been meticulously restored. And the spa is super luxurious, offering treatments that end with a glass of tokaji, Hungary's signature wine.

Yet the really big factor distinguishing the Gresham Palace from other luxury hotels elsewhere in Europe is the price. For instance, at its revered and similarly opulent Parisian sibling, the Four Seasons George V, the lead-in rate for a double room is 710 per night. Here double rooms start at 310 per night.

When the Gresham Palace opened, it easily eclipsed the competition. However, in May, the Italian Boscolo group reopened the New York Palace Hotel in downtown Pest. It rivals the Gresham at least in terms of restored grandeur.

This time it was a Manhattan insurance company that commissioned the building, in 1894. Ostensibly it was constructed in the image of a Renaissance palace, though the result is more Gotham Gothic than Italianate. The interiors have been lavishly restored with acres of marble, bronze and Venetian glass; even standard rooms have silk-lined walls, chandeliers and marble bathrooms.

It's a tough choice between this and the Gresham. But if you opt for the latter, at least drop by the New York Cafe for a drink, partly to pay homage to the memories of film directors Alexander Korda and Michael Curtiz, who used to drink here before they left for London and Hollywood.

Both hotels are destinations in themselves but it would be a shame not to explore the rest of the city. If Franz Josef hoped 19th-century Pest, east of the Danube, would come to resemble Vienna, then older Buda, which rises beyond the opposite bank, recalls another Habsburg capital . . . Prague. There are not so many spires and fewer winding lanes, but then there are no human statues, no tawdry souvenir stands and no seething crowds. Head north into Baroque streets and you'll find yourself in a sleepy backwater, a world away from the style and luxury found across the river.

GETTING THERE
>> Aer Lingus flies daily to Budapest. Fares are from /29 each way. www. aerlingus. com
>> For more information on the Four Seasons Gresham Palace and the New York Palace hotels check out their websites: www. fourseasons.com/budapest www. boscolohotels. com