From the editors of Condé Nast Traveler:

It's no small feat to open next to the illustrious Grand Hotel and promptly steal the crown of Stockholm's best hotel. The Lydmar feels like a country house in the heart of the city. The 46 neutral-toned rooms are wonderfully spacious, while the dining room/bar, with its walls lined with books and the sort of artfully arranged clutter that can be achieved only by a lifetime of luxury travel, feels like a living room. Public spaces are decorated with documentary photos, while the views of the harbor and the Royal Palace are superb. In 2005, owner Per Lydmar closed his first eponymous hotel—a property known for its live music and wildly decorated rooms. What sets his second venture apart is faultless style and an atmosphere of relaxed comfort that's made it the talk of the town.—2009 Hot List

When to go: Anytime in the summer (though July can be too quiet, as the Swedes take their annual monthlong holiday).

Which room to book: No. 201 or No. 401—junior suites with perfect palace views.