If you're on the N111/E901 Madrid-Valencia motorway, south of Madrid, you might ask why you should detour to Ucles, apparently in the middle of nowhere. Arriving at the sleepy small hill town with a vast, eerily deserted monastery-church perched at the top, you may ask again what a decent hotel could be doing here. Which makes Casa Palacio all the more charming when you find it. The solid stone town house, several hundred years old, has been beautifully converted into a hushed small hotel. Down one side of the central courtyard is the restaurant. A wooden gallery at first floor level (supported on antique stone columns at each corner), works the usual charm. A delightful little sitting room on the ground has an elegant, but simple fireplace with logs piled each side, perhaps as you would have them at home.
Genuine, unpretentious country antiques and artefacts - here a weighing scales, there a chest - rub shoulders happily with the occasional modern piece. Bedrooms are just about OK for space, done out in simple rural style; bathrooms are also smart-rural, with many a hand-painted tile. At the back is a sheltered swimming pool area around which the grass is kept green, even in the furnace of the Castillian summer.
Drawbacks: service may not be instant, and (for foreign guests) little or no foreign languages are spoken. But it's a real Charming Small Hotel.