The nightlife in Madrid is the real reason the city is so popular with young people. During the day the city can be a little dry- with all the museums, parks, etc. Most nightlife gets going really late compared to that in the States. Here are a couple recommendations:
Go to a Flamenco dinner show
A Flamenco dinner show is a great cultural nighttime option. If you are traveling to the South of Spain, particularly Granada or Seville, it's best to find a Flamenco show in these cities. It will undoubtedly be cheaper and more authentic. However, Flamenco shows in Madrid are still a good option if you won't be traveling outside of the capital.
Try a few tapas bars
A tapas crawl can be fun if you find the right places. Avoid some of the tourist traps in the Sol area, which are overpriced. Ask your hotel for suggestions. Vinoteca, in Plaza Santa Ana, is a one good option.
Check out some of Madrid's big night clubs
Madrid's night clubs are a fun experience. None card, and as long as you look about 18, you won't have any problems getting in. Try Kapitol, across from metro stop Atocha, and Palacio Real (near Sol). Kapitol claims to be the biggest club in Europe. Both charge a cover of 12-15 euros and get busy at around 2 AM.
Hit the bars:
Madrid is full of good bars. Some of the best bars for young people are in the Moncloa, Tribunal, Bilbao, and Malasana neighborhoods. Here are a couple of bars that are normally flooded with American and Spanish college students, as well as others:
o El Chapandaz, "The cave bar" - (Calle Fernando El Catolico 77, Moncloa) Cool looking bar decorated like a cave. Some drinks are poured from a tap in the form of a rock formation hanging down from the ceiling. Good Thurs. through Sat.
o Casa de la Cerveza (Metro Bilbao) - This bar is normally packed on off nights because of its all-you-can-drink for 10 euro deal (from 11-1:30 I believe). You can try Sangria, beer, or red wine and coke (called calimocho- popular with the young Spanish crowd).
Note: Avoid the bars that promote around the Sol area. Some of the Irish bars are OK, as are many of the bars located in underground caves.
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