Spain/Portugal/Gibraltar - 2 Days In Madrid

We'll be staying in Madrid fr 2 days this summer, first time to Madrid but not Spain. What is the best area to stay in? Not looking to do "touristy" things, just looking to walk around and enjoy the city.

Budget is no more than $250 USD/night. Ive looked at the Hospes, Chic and Basic, Hotel de las Letras and Hotel Urban.

Any comments are appreciated.

bump...any suggestions?

It depends on what kind of neighborhood you want to use as your base. I find walking in Madrid very easy so you should be able to see a lot no matter where you are. I'm basing the following on what I can tell about the location based on hotel website, not based on particular knowledge of any of the hotels, so this is very general advice.

Trendy/chic/young/busy: stay in/near Chueca; the Gran Via area where Las Letras is would work for this too, though it is a bit more mainstream/ commercial than trendy. You would be positioned between Chueca and the historical center of town if you stayed there, very contrasting areas that would give you different perspectives on the city.
Upscale/"grand boulevard"/trees/museum district-y: stay near the Paseo del Prado, or Retiro Park (Hospes or Urban on your list). Probably a bit quieter (less congested) than some other areas.
"Old city"/historical/center of town: stay near the Plaza Mayor; of your choices, Chic & Basic Mayerling (close enough to Plaza Mayor/Sol to be central, far enough away to be out of the major tourist crush). This hotel would put you close to the famous Rastro market. The area around Tirso de Molina is fairly grungy (and druggy) so if you are sensitive, or have small kids, maybe avoid that particular area. There are plenty of other options if you want to be near the center.
The Chic & Basic Atocha, I would avoid, just bc I dislike that part of town. It's like any neighborhood near a train station. Lots of kebab shops.

I can't really recommend anything in particular bc I stay with friends when I go to Madrid. Stay away from hotels in Sol unless you want to be smack-dab in the middle of everything (incl. tourist crap).

Im looking to stay in the trendy hipster neighborhood, i find staying in those areas allows you to best absorb the vibe of the city.

what about the area of Lavapies, i read thats cool

Sorry, I don't know the Lavapies neighborhood. I can say that both Chueca and Malasana would be a good bet for you based on your preferences.

I used to have De las letras as my base in Madrid 2006-07 and stayed there about 20 times in that period. It was a nice hotel (I haven't stayed there since 2008 so no recent experience) and is very well situated for exploring Madrid on foot, as well as easy metro access. Malasaña and Chueca are very close by.

If you do stay there, don't go for a basic room, take a Plus (with terrace) or a DL (with terrace and outdoor jacuzzi). The difference in quality is out of all proportion to the difference in price. These rooms with terraces are also what sets this hotel apart from others in Madrid, in my opinion.

I travel to madrid every year and I always stay at the intercontinental on Paseo de la castellana, the hotel is in the salamanca barrio, a non touristy part of town. The hotel is about a 10 minute walk from the shopping and dinning area of the salamanca barrio. great hotel.

We spent ten days in Madrid a couple of years ago, staying at the Starwood Palace (using Starpoints). The area is great and within a couple of blocks of up and coming "hipster" areas. Also, across the street from the Prada. While this is the classic tourist area it has great options for nightlife on the back streets.

Be sure to eat at the Terra Mundi restaurant which is close by. Ten Euros for lunch with a bottle of wine and the food is amazing.
http://www.terramundi.net/index.php?idlenguaje=en&idseccion=1

I'd go back just to have lunch there.

Any comments on hotel de las letras, it keeps coming up in a lot of my searching?

Any comments on hotel de las letras, it keeps coming up in a lot of my searching?

See my post #6 above.

Thanks, dont know why that post did not register.

Booked de la letras for 99eur/night. Thanks for the help all.