New South Wales is the state that keeps on giving. We first went to Sydney four years ago and were bowled over by its beauty, and the optimism and innovative spirit of the people who live there. This year, when we returned with our children, we were wowed all over again.  The city has always had plenty for visitors to enjoy and it had only got better since our last visit. Bill Granger’s cafe in Darlinghurst, called Bills, and Neil Perry’s contemporary Chinese restaurant, Spice Temple, were as good as we remembered them. But there were lots of new discoveries, too: the garden-fresh food at Chiswick in Woollahra; the southern French menu at Café Nice in Circular Quay; and Alpha Restaurant in Castlereagh Street, a fantastic new Greek restaurant where the moussaka comes with an Australian twist – scallops.  There were as many treats for our children as there were for us, both in the city – Taronga Zoo, the Manly Ferry and the sandy beaches – and in the areas around it. Nearby are the Blue Mountains, rich in myth, the vineyards of the Hunter Valley and a coastline famous for its sun-bleached beaches. At Mr&Mrs Smith, we look for hotels that balance style, service and personality without neglecting comfort, and on our trip, every place we stayed was of a high standard, whether it was a romantic retreat, a shoes-off beach hideaway or a decadent modern haven.  What did we do? At QT Sydney, one of the city’s hippest boutique hotels, we took full advantage of the facilities, chilling out at the spa by day and drinking negronis in the bar by night. When we felt like kicking off our shoes, we went glamping by the sea in Jervis Bay or surfing in Byron Bay. We spied kangaroos in the Blue Mountains and sipped wine (perhaps a little too much) among the vines of Mudgee.  Where will we stay when we go back? At these, our favourite boutique retreats.  Best boutique hotel for urban glamour: Establishment Hotel, Sydney  We felt immediately at home at this super-luxe hangout for Sydney’s movers and shakers, kicking off at the Establishment Bar, with its 138ft-long pale marble counter, then moving upstairs to Hemmesphere for a cocktail. You can’t help but love the food here, from breakfast in the verdant Gin Garden courtyard and authentic Japanese dishes at Sushi E, to modern Australian cuisine at the fine diner, Est, and glam Cantonese at Mr Wong. The hotel is incredibly comfortable, with 31 modern and spacious rooms, some dark and vibrant, others lighter and more sedate. The bathrooms suited us perfectly: I loved the drenching rain shower; Tamara was wowed by the sleek freestanding tub and Bulgari products.  James: “Try the roasted duck, faux-shark’s fin soup, abalone, and the best dim sum in Sydney at Mr Wong, headed by chefs Dan Hong (from the Sydney hotspot Ms G’s) and Eric Koh (from Hakkasan).”  Tamara: “Dress up, not down; this is a place for sociable party people, such as Robbie Williams and the Scissor Sisters.”  The details Establishment Hotel; 5 Bridge Lane, Sydney (doubles from A$249/£143).  Best boutique hotel for rural relaxation: Sangoma Retreat, Blue Mountains  The fun began the moment we met our South African hosts, Michael (a former art consultant) and Zenga (a make-up artist), together with their dog, Pundah. They built this modern eco-retreat just 70 minutes’ drive from the city so Sydneysiders could go walking and relax. Relaxing isn’t too hard in the five safari-style contemporary rooms, all with bush views; the split-level Chief’s Suite even has its own plunge pool. The bush walks made us feel like we were a million miles from the city, although Zenga’s Ottolenghi-influenced seasonal food was a world away from Australian country fare (one of the highlights was the paella-esque dish of prawns, chicken and meatballs in Moroccan spices, accompanied by a salad of sprouts, peas and bocconcini).  James: “Spend afternoons wallowing in the infinity pool or spotting kingfishers from your deck. Come nightfall, head to the cinema room to settle down with some DVDs.”  Tamara: “Sangoma’s therapist is an expert in flowing Hawaiian Ka Huna massages, which are incredibly therapeutic. Chill out afterwards in your two-person Philippe Starck bath.”  The details Sangoma Retreat; 70 Grandview Lane, Bowen Mountain (doubles from A$483/£277).  Best boutique hotel for design amid the vines: De Russie Suites Mudgee, Mudgee  We loved this delightfully urban, dark and seductive hideaway: an unexpected find in the up-and-coming Mudgee wine region, about three-and-a-half hours’ drive from Sydney. More a b&b than a hotel, it is housed in an 1862 Mechanics Institute building, with 13 apartments painted in sedate monochrome and decorated with contemporary art and sophisticated furnishings. Although a wonderful breakfast bag is included in the rates (crunchy Whisk&Pin muesli, fresh breads, Hank’s Jam and Bills Beans coffee), we enjoyed exploring the local delis, farmers’ markets and cafés before we hit the wine routes. There are more than 40 cellars nearby; we recommend Logan, Optimiste and Robert Oatley Vineyards. Leave time to check out the historic gold-rush towns and national parks further afield.  James: “We liked Junior Spa Suite 201 for its seductive spa bath and balcony: a perfect spot to sit with a morning coffee. For extra space, bag the impressive Blue Room.”  Tamara: “The hotel was salvaged from an old building; take a good look at photographs of its restoration on the staircase leading to the rooms.”  The details De Russie Suites Mudgee; Corner of Perry and Gladstone Streets, Mudgee (doubles from A$151/£87, b&b).  Best boutique hotel for a glamping escape: Paperbark Camp, Jervis Bay  This place is just a skip from one of the most beautiful white-sand beaches we’ve ever seen: Jervis Bay on the southern coast of New South Wales. It’s only two-and-a-half hours from Sydney, but the 100-acre retreat overlooking the Jervis Bay National Marine Park feels really remote. Accommodation is more glamp-site than campsite. The bush camp was built by former Sydneysiders who escaped the city, and they’ve fitted out 12 tree-fringed tents with comfy beds, organic toiletries and ensuite showers (and even baths in the deluxe rooms). They all have wrap-around verandas. We spent our days bushwalking, kangaroo-spotting, kayaking, snorkelling, diving and whale-watching, and by night retired to the treetop restaurant, Gunyah, for some modern Australian-meets-Central American food. They call this “a place for possums and foodies”; both were very much in evidence during our stay.  James: “Of all the tents, Kookaburra was our favourite, for its prime location beside the creek: ideal for our dawn kayaking adventures.”  Tamara: “Take up the Paperbark Challenge and canoe to nearby Huskisson and back, then chalk up your time on the communal blackboard.”  The details Paperbark Camp; 571 Woollamia Road, Woollamia (doubles from A$295/£170, b&b).  Best boutique hotel for a gourmet getaway: Bells at Killcare, Central Coast  We knew we would have to book well in advance to eat here. Sydneysiders love Bells as much for its restaurant as for its Hamptons-style hotel. It took us only 90 minutes to drive there (although we could have taken a 20-minute ferry from Palm Beach), a pilgrimage justified by the high standard of Italian food prepared by chef Stefano Manfredi. The dining room has a crisp, coastal feel (all blues, sands and whites) in keeping with its location near Bouddi National Park, and the bar is lined with chesterfield sofas, ideal for sinking into with a signature bellini. Even nicer, after lunch we slunk off into our cottage suite, with its elegant nautical interiors and Ralph Lauren furnishings.  James: “Pick up one of the hotel’s bushwalking maps and explore the local area, with its nine pretty beaches. Backpacks, delicious Manfredi-orchestrated picnic hampers and even guides to the area can be provided.”  Tamara: “Time your visit to coincide with Bells’ bi-monthly cookery classes or its monthly wine dinners, or just join a daily tour of the fantastic kitchen garden.”  The details Bells at Killcare; 107 The Scenic Road, Killcare Heights (doubles from A$250/£144, b&b).  Best boutique hotel for spa-side wining and dining: Spicers Vineyard Estate, Hunter Valley  There are two kinds of visitors to this estate: those who enjoy working off their meals playing bocce or tennis, and people like us, who prefer a spa. The Spa Anise here is particularly good, with poolside treatment rooms, aromatherapy massages using local Waterlily products and detoxifying body wraps (handy if you have hit the wine cellar a little too hard). In this area, wine features prominently on itineraries: the Hunter Valley is just two hours north of Sydney, and there are more than 150 wineries nearby. Its Restaurant Botanica, headed by chef Mark Stapleton, serves up contemporary Australian food, using home-grown vegetables and home-reared meat. Sleep it off in one of the eight neutral-hued suites overlooking fields of vines.  James: “At Botanica, make sure you get a table at the window or out on the airy veranda, to take advantage of the views, and try the caramelised pork belly with soy, ginger, shallots and garden greens.”  Tamara: “Get the concierge to arrange a tasting tour to sample the finest wines, as well as cheese, olives and chocolate.”  The details Spicers Vineyard Estate; 555 Hermitage Road, Pokolbin (doubles from A$299/£172, b&b and minibar).  Best boutique hotel for a romantic retreat: Tower Lodge, Hunter Valley  If we weren’t already married, one of us would have popped the question here. It’s wonderfully romantic: a multicultural modern manor house littered with antiques and curios collected over decades of globetrotting. There are 300-year-old Rajasthani beds and marble-topped tables, an Italian-style courtyard, a chic pool and a spa fit for an emperor. We dined at the lodge’s Roberts Restaurant, where chef George Francisco blends Australian and global flavours. Tamara was impressed by the vegetarian menu (and she’s no veggie), and we both still remember the vanilla pannacotta with pomegranate and lavender. We didn’t have time to try the 18-hole putting green, but it’s always good to have an excuse to go back.  James: “Stay in the seductive Oriental Room, with a wooden bath on its deck.”  Tamara: “For heavenly vineyard views, take to the skies in a hot-air balloon.”  The details Tower Lodge; 6 Halls Road, Pokolbin (doubles from A$450/£259).  Best boutique hotel for beachside serenity: Victoria's at Wategos, Byron Bay  Our first impression of this feminine, 10-room guesthouse was that it felt like a slice of Tuscany, with its fairytale four-posters, antique dressing tables and sumptuous marble baths. But the setting is very Australian: a short hop from pretty Little Wategos, where, for the first time, we saw dolphins surfing the breakers. The beautiful beaches of New South Wales don’t come more mind-blowing than those at Byron Bay. Just a 75-minute flight from Sydney (or a longish nine-hour drive), the little town has also become the place in Australia for alternative living, with travellers drawn to its thriving surf scene, nature-based spas, spiritual leanings and superior coffee.  James: “Walk to Cape Byron Lighthouse, Australia’s most easterly point, with its sweeping views. Whales often pass by in winter.”  Tamara: “Look like Elizabeth Taylor in the 1970s by packing a vibrant kaftan, metallic flip-flops and oversized sunglasses for the poolside terrace.”  The details Victoria's at Wategos; 1 Marine Parade, Wategos Beach, Byron Bay (doubles from A$399/£230).  Best boutique hotel for coastal grandeur: Victoria's at Ewingsdale, Byron Bay  We couldn’t help but fall in love with this area, with its organic markets, yoga sessions and glorious beaches (there are seven, our favourites being Clarkes and Wategos, for swimming and surfing). Not that you would want to leave Victoria’s for long. Like its sister hotel (above), it is a little tropical hideaway, with nine rooms overlooking gardens, a saltwater pool and a cabana for lounging. There is no restaurant, but breakfast and tea are served, and you can order gourmet picnic hampers and casual platters. Byron has lots of restaurants, too; our favourites are Byron Beach Café, the Bayleaf Café and Rae’s Fish Café.  James: “Book into one of the spacious Executive Spa Suites, with their spa baths and Juliet balconies.”  Tamara: “Take advantage of the in-house therapist, and have your treatment in the garden.”  The details Victoria's at Ewingsdale; Top of McGettigans Lane, Byron Bay (doubles from A$299/£172).  Best boutique hotel for quirky atmosphere and cool style: QT Sydney, Sydney  As soon as we walked into this 200-suite hotel in the centre of town, we knew it wasn’t a place for shrinking violets. For a start, the door staff greet you in stockings, high heels, red wigs and berets (not your average doorman’s outfit). The building once housed the State Theatre and Gowings department store, and the designers have kept the Gothic and art deco spirits alive.  The food and drink are as inventive as the retro interiors, from the coffee parlour (serving the best banana and honey smoothies and freshly roasted coffee) and the European brasserie to the seriously sexy cocktail bar. Men will appreciate the traditional barber. We appreciated the QT Sydney Concierge app, giving an inside track on the city that guidebooks can’t.  James’s tip: “Work your way up from negronis at Parlour Lane Roasters, on the ground floor, to vintage cocktails at Gilt Lounge. I’d recommend the Smoked Applewood Bacon Old Fashioned, an unlikely but delicious mix of bourbon, creole bitters and chocolate-covered bacon.”  Tamara’s tip: “Book yourself into the quirkily elegant SpaQ, and unwind in the steam and ice room, inspired by a hammam, before indulging in a Kerstin Florian facial.”  The details QT Sydney; 49 Market Street, Sydney (doubles from A$280/£160).  All the hotels above can be booked through Mr&Mrs Smith, with a price-match guarantee. Fly to Sydney daily with British Airways from London Heathrow Terminal 5, with return economy fares from £899. Book at ba.com. For more information, see australia.com. This article originally appeared in Ultratravel, The Telegraph's luxury-travel magazine. Catch up on previous issues here.
The top boutique hotels within and near Sydney, chosen by James Lohan and Tamara Heber-Percy, co-founders of Mr & Mrs Smith