Those looking for a more youthful and sexy hotel alternative to Copacabana find few true luxury options on the beach in Rio. In fact, only Fasano Rio de Janeiro fits the bill on the far edge of Ipanema, in a midrise property with rooftop pool and, recently, a roster of celebrity clients including Beyonce and Madonna.

Those willing to sacrifice a beachfront location in Rio find the area of Santa Teresa brimming with chic eateries and boutique hotels. Hotel Santa Teresa, operated by Relais & Chateaux and owned by a team of French investors that includes Francois Delort, is the neighborhood's top hotel. The former coffee plantation has been remade into one of South America's most impressive design hotels, with a highly sophisticated palette of midcentury antiquities, primitive artwork and rustic architecture decorated by Delort himself.

Hotel Santa Teresa occupies a promontory overlooking the Rio skyline with a zen-inspired pool surrounded in teak loungers and a grassy yard occupied by fashionistas and luxury revelers. Despite the culinary treasures found in this boho neighborhood, the true standout is the hotel's own French eatery, Tereze, led by former Alain Ducasse protege Damien Montecer. The resurgence of Santa Teresa into one of Rio's trendiest neighborhood offers a glimpse of what many of the city's grittier neighborhoods could become in the future.

One would expect that in anticipation of the World Cup and Olympics, hoteliers would be lining up to open Four Seasons and Ritz-Carlton outlets. But only Hyatt Hotels ( H) has emerged with solid plans for a 470-room property under its middle-range Grand Hyatt brand in Barra da Tijuca, a northern suburb of Rio where most of the Olympic events will be held. The property will feature two restaurants, a fitness center, destination lounge and pool bar.

As for other hoteliers scouting Rio, Ian Schrager recently mentioned the city for an outpost of Schrager Hotels, the group he formed following the recent sale of his stake in New York's Gramercy Park Hotel. His plans include a series of owner-operated properties funded in part with Morgan Stanley ( MS) and just the type of cool, luxury hotel infusion needed here.

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Michael Martin is the managing editor of, a luxury travel and lifestyle guide based in Los Angeles and London. His work has appeared in InStyle, Blackbook, Elle, U.K.'s Red magazine and on ITV and the BBC.

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