Plaza Santa Ana is a great place to start an evening's entertainment in Madrid. The Madrileños will often start arriving to this area around 11pm on Friday's and Saturday's. Plaza Santa Ana is a very pleasant square just off Puerta del Sol and situated in an older barrio of Madrid; indeed the house where Miguel de Cervantes (writer of Don Quixote) lived is a couple of streets away in calle Cervantes. The square is home to the oldest theatre in Madrid, Teatro Español, which was built in 1745 and puts on classical Spanish productions. At night the square becomes one of the most important hot spots for night time entertainment.
My favourite bars in the square include La Moderna and Cerveceria Santa Ana and Cerveceria Alemana the latter are typical Madrid bars with oak panelling, huge beer pumps and waiters turned out in white waistcoats. Another favourite is Naturbier, which is unique in Madrid as it brews its own beer - it has a cavernous basement and serves good food. In one of the streets next to the theatre, you will find Viva Madrid which is an elaborately tiled bar with great wooden ceilings. Just around the corner from Plaza Santa Ana, you'll find Calle Huertas which comes alive at night and has a vast array of bars, catering for all needs. The main hotel in the square, Tryp Reina Victoria, is closely associated with bull fighting and it is the place where the top Spanish bull fighters choose to stay whilst in Madrid.
The Tryp Reina Victoria has undergone extensive refurbishment and is now called the ME Madrid Reina Victoria.