On a recent visit, I stayed at the Kempinski Hotel Corvinus, a classic luxury property with modern amenities. It is located on the Pest side of the Danube (better for basing a visit, in my opinion, than the Buda side). Winter rates are $450 per night, but the hotel has frequent specials. (At press time, rooms could be had for under $200 per night.) Other five-star properties in Budapest exceed $500 per night, so this is a smart splurge. After settling in, I recommend a morning bus tour to get an overview of the city and then lunch at Gerbeaud, a famous—and often crowded—café established in 1858. Over the next few days, visit the Fine Arts Museum, which houses many masterpieces from around the world, and the Museum of Torture, which intelligently chronicles Hungary’s turbulent 20th-century history, with exhibits on Nazi occupation, the Soviet years, and the 1956 popular uprising.
After a day or two of touring, there is nothing better than a visit to one of Hungary’s famous baths, which locals use for everyday relaxation and physical therapy. Gellert is the city’s most famous—a good example, though it could use a face-lift. Two other options are Szecsenyi and Kiraly baths.
As for dining, an excellent traditional dinner can be had at Gundels. For more modern fare, try Tom George, a chic place with a young crowd. A low-key, lovely bistro is Café Kor; it has one of the most flavorful steak tartares I can recall. Wherever you go, be sure to try Hungarian wine, which is both inexpensive and quite good.
Finally, no visit to Budapest is complete without experiencing a concert or recital. The city has a rich musical history, and the State Opera House is arguably the most beautiful in Europe. I was able to snag last-minute box seats at a very reasonable price (less than $30 per person). Budapest offers many such opportunities. It may not have the intense high energy and color of western capitals, but it is certainly one of the most beautiful, noble cities in Europe.