Istanbul's hotels have come a long way since the days of the hippie trail, when budget travelers were looking for a slice of the Orient, an exotic smoke, and a cheap bed. The major luxury chains, including Four Seasons (with two properties), Ritz-Carlton, Kempinski, W, and Park Hyatt have opened for business. More and more independent boutiques like Ansen Suites, the House Hotel, and Witt Istanbul Suites have sprouted up in the center of town. Even the crusty old Pera Palace, which housed Agatha Christie and other Orient Express passengers back in the day, has gotten a facelift. Those with an urge to stay in the Old City, Sultanahmet, should be aware that the proximity to the main historic sights has its downsides: a poor selection of nightlife and eating options, generally shoddy hotels (exceptions listed here), and ceaseless haranguing from touts. Most of the luxury options are in the more "modern" part of Istanbul north of the Golden Horn, or across the Bosphorus.
To understand the lay of the land in Istanbul, visit our Fact Sheet.