There are many traditional hotels to stay in Lisbon along with some more contemporary boutique hotels. I liked staying in the Bairro Alto, Chiado area to take advantage of being able to walk to restaurants, museums, cafes and shopping.
LX Boutique Hotel, Rua do Alecrim12: Taking the recommendations from both the NY Times and Wall Street Journal, I chose this smaller boutique hotel in the Chiado area. I am really, really pleased with my choice. The staff is wonderful and helpful with reservations and information, the breakfast is great, my room has a contemporary design and is very attractively decorated with a huge mural of guitars over the bed. Each floor has a theme, mine is Fado, the famous music of Portugal. It is a 10 minute walk uphill to the main square with access to all of the shopping and restaurants and bars in the Bairro Alto. At night the restaurant becomes an attractive, candlelit sushi restaurant. I enjoyed a glass of port there on my last night in Lisbon.
Uphill a short distance is the Bairro Alto Hotel. This is a stylish boutique hotel, in a perfect location, that gets great reviews in the press and from friends. It has a trendy bar, Cafe Bar Ba on the lower level. Praça Luís de Camões, N.º2