new hotel, the Villa Venecia, with five stars above its door. It is a boutique spa hotel, to boot, with spectacular views out to sea and to the wedge-shaped island that punctuates the Benidorm horizon – La Isla de los Periodistas.

A new hotel, the Villa Venecia, with five stars above its door. It is a boutique spa hotel, to boot, with spectacular views out to sea and to the wedge-shaped island that punctuates the Benidorm horizon – La Isla de los Periodistas.



"We opened a year and a half ago," said employee Tito as he took me to the chill-out terrace, gym, massage room and Jacuzzi. "We get a lot of couples wanting to recharge their batteries." The head chef, Victor Conus Cervantes, from Barcelona, is aiming to get a Michelin star within the next couple of years. "That's the way Benidorm is going," said Tito.

As if by way of confirmation, later that day I had lunch with an old friend, Jorge, at Taita (Calle Primavera 8, +34 965 852 148), one of a new generation of high-class restaurants in the town. Others include El Mesón (Calle Gerona 5, +34 965 858 521), and Rias Baixas (Plaza del Torreó 3, +34 965 855 022), known for its excellent seafood.

As we sat on the terrace eating crispy grilled duck breast with dauphinoise potatoes, Jorge told me Benidorm really was changing. "Take this place," he said. "Was there anything like this restaurant when you were last here?"

There wasn't. Nor were there Balinese chill-out lounges, designer boutiques or swanky gin bars like the one I'd seen as I crossed town.

Perhaps even more surprising than the town attempting to clamber upmarket is the assertion that it could become a model for sustainable, mass-market tourism.

"Ah, yes, the Benidorm model – everyone's talking about it," Jorge said. "By building vertically rather than horizontally you get more people in, but you cause less damage to the landscape. Imagine if you had to fit all the millions who come here into low-rise accommodation. It would be a disaster."

I had my doubts. Many would say that Benidorm is already a disaster. But a number of respected architects, including Luis Fernández-Galiano of Madrid's Universidad Politécnica, are claiming that the resort is an example of sustainable urban development. Alfonso Vegara, the former president of the International Society of City and Regional Planners, says Benidorm and Manhattan are both sustainable "intelligent terrains".

Perceptions of Benidorm are changing, and much of the impulse behind this appears to be coming from the town authorities themselves. While the resort still caters principally for families and the elderly, the new administration is keen to attract sophisticated and independent travellers. To this end they're targeting students and the gay market, as well as people interested in adventure and sport (the scuba diving is among the best along the coastline).

As part of this programme, last July saw the first Low Cost Festival (21-23 July 2011, festivallowcost.com), a three-day music event with more than 40 acts, including bands such as Placebo and Editors. A sister techno festival, Electrobeach (24-27 August 2011, electrobeachfestival.com), is held in August.

"Benidorm is adapting to survive," a Town Hall spokesman assured me. "In five years' time we will still be the Med's number-one resort."

• Hotel Villa Venecia (+34 902 165 454, hotelvillavenecia.com) charges from €192 for a room half-board or €155 B&B. Budget airlines fly to Alicante from several UK airports.