Room Service: The Caledonian, Edinburgh

The Caley, as it is affectionately known in Edinburgh, has had a makeover – a £24m makeover, in fact – and has joined the upmarket Waldorf Astoria portfolio. This once-grand sandstone Victorian railway hotel has, for the past few years, been languishing – a tired, lacklustre Hilton – at one end of Princes Street. At the opposite end of Edinburgh's main drag, meanwhile, The Balmoral, Rocco Forte's glamorous revamped railway hotel has become the traditional choice for those looking for classic five-star luxury with a contemporary design edge.

Now, however, The Caledonian is aiming to give The Balmoral a run for its money and, with its recent unveiling of the UK's first Guerlain spa, all the pieces are in place. The French beauty house famed for its perfumes opened its first Institut de Beauté in Paris in 1939, and today the name still conjures up the ultimate image of pampering and indulgence. The new spa offers a tranquil sanctuary from the chaos of the capital's streets – and the mayhem of the ongoing tram works outside the door. As do the top-hatted doormen at the entrance who usher you into the cool, calm marble reception crowned with a sparkling chandelier.

Another addition is Peacock Alley, a Waldorf-Astoria staple (it was the alleyway between the original Astoria and Waldorf hotels in New York) – an airy lobby lounge in what was the old station concourse, complete with the original Hamilton & Inches clock, which was rescued from a fire in 1890. Other historical highlights include the main staircase with listed stained glass windows bearing the coats of arms of each of the towns that the Caledonian railway passed through. (You can take a walking tour through the hotel devised by Edinburgh World Heritage – handy when it's raining.) But the makeover doesn't stop at the interiors. The Michelin-starred Galvin brothers now oversee dining at the hotel. The Pompadour by Galvin is the fine-dining option, with more than a nod to French boudoir-chic. The refurbished room is unlike anything else you'll find elsewhere in Edinburgh: a feminine palette of soft greys, with delicate hand-painted murals and intricate plasterwork. The food is equally fancy, but the whisky trolley is the pièce de résistance and a reminder that you're in Edinburgh, not Paris. Galvin Brasserie de Luxe, where breakfast is served, is the more casual choice with blue banquettes, a station café vibe and a crustacea bar.

The Caley hasn't quite got the Olga Polizzi design magic that you'll find at The Balmoral, but it is definitely back in the game.

Location

It stands at the west end of Princes Street, Edinburgh's main high street, in the shadow of the craggy castle – between the medieval Old Town and grand Georgian terraces and crescents of the New Town. Most of the Scottish capital's main sites are within walking distance. It's just a short stroll to Castle Terrace for the farmers' market every Saturday. Here you can mooch around the stalls with their jaunty red and white striped awnings, tuck into a pot of creamy porridge from the Stoats Porridge Bar, then weave up to the castle itself. Wandering down the Royal Mile from the castle to Holyrood Palace and the state-of-the-art Scottish Parliament you'll find specialist whisky and cashmere stores scattered amid the tartan tat. Veer off the Royal Mile to the right, and you have the revamped National Museum of Scotland. Or take a left, down the Mound, and you're back to Princes Street, the Royal Scottish Academy and the Scottish National Gallery.

Comfort

There are 241 rooms and suites split between the original hotel and the slightly less inspiring Seventies extension at the back (where you'll find the compact classic rooms). My deluxe room, 302, had huge sash windows and that all-important castle view. Grey wood-panelled walls are topped with gold thistle wallpaper, the windows framed with cosy floor-to-ceiling grey woollen drapes. The rooms are individually designed but have the same palette and design themes. Other sophisticated touches include Nespresso machines in the rooms, iPod docking stations and Salvatore Ferragamo products in the classic marble bathrooms.

Travel Essentials

The Caledonian, Princes Street, Edinburgh EH1 2AB (0131-222 8888; thecaledonian edinburgh.com)

Rooms ****

Value ****

Service ****

Doubles from £159, room only.