Think Chiang Mai and the chances are you will think backpackers. At the Souvenir Guest House near the northern Thai city's famous night bazaar, for instance, you can still get a meal for $6.50, a room for $30 a night and a Thai massage for less than $40. One hundred metres across the road, however, is a vastly different story. Here, at The Chedi, Chiang Mai, a stylish five-star hotel that opened on July 1, rooms start at $1,400 a night, and a massage and body treatment at the hotel's luxury spa can cost up to $700. This is the chic new face of Chiang Mai. The city is undergoing a makeover that may soon transform it from a low-cost trekking and rafting destination for young travellers to a top-end spa destination for well-heeled weekenders from Hong Kong and around the region. Until the beginning of this year, the only top-end resort in the area was the Four Seasons Resort, set in lush green hills 15km and a galaxy away from the bustling city of 250,000. The Four Seasons celebrated its 10th anniversary this year. Its spa, with seven treatment rooms, was the most sophisticated in northern Thailand when it opened in 1999, and staff would pamper the mostly American guests with its range of Thai and Indian treatments without a whiff of serious competition. That all changed six months ago with the opening of the Mandarin Oriental Dhara Dhevi - an extraordinary, 28-hectare villa complex inspired by the ancient Lanna kingdoms of northern Thailand that cost a reported US$100 million to build. Villas cost between $2,300 and $12,500 a night, and guests can indulge in the Dheva Spa, a complex of teak wood buildings modelled on the Mandalay Palace in neighbouring Myanmar. The top spa package is a $2,300 Royal Thai Ceremony - a treatment lasting three hours and 30 minutes that includes a royal foot bath, herbal steam and sarong bath, a safflower scrub, a kraw khruea wrap and a royal Thai massage. Spa director Suchada Marwah said the treatments offered at the Dhevi Spa, situated 3km from the centre of Chiang Mai, reflected the extraordinary architecture of the building. 'We want our guests to feel like royalty,' he said. The arrival of the Dhara Dhevi resort has prompted the Four Seasons Resort - which offers an extensive range of treatments using Lanna- and Indian-inspired treatments in traditional Thai style suites - to rise to the challenge. At the Four Seasons, massages start at $545 for a one-hour treatment and $933 for a two-hour traditional Thai massage. The Spa has recently introduced a selection of anti-ageing facials using Elemis Spa products, mostly at $1,130 a treatment. It also offers a range of Ayurvedic and holistic treatments including the Ancient Arts Awakener at $1,244 - a foot bath, polish and massage using Dead Sea salts, frankincense and myrrh, followed by a head massage and herbal steam bath. The recently introduced Chakra Light Steam treatment uses coloured herbal steam baths to relax, invigorate and heal. A Gentlemen's or Ladies' Getaway Spa package of up to three hours costs $1,322. Vanicha Phaphoom, assistant spa manager at the Four Seasons Resort, said the competition had brought about changes. 'We have to be more personalised to suit the needs of each guest,' she said. 'The arrival of competition means our regular guests might try other resorts.' Customers' demands have changed significantly since the Four Seasons Resort opened its spa six years ago. 'The trend is not just for pampering as it was five or six years ago. Today it is more about healing. And traditional Chinese and Indian knowledge are popular among guests now,' she said. The spa at the The Chedi will open next month with 10 private suites - five double and five single - all of which will echo the simple but chic contemporary Asian style of the hotel, according to Brenda Ramen, spa director of the GHM (General Hotel Management) chain. Treatments will range from practical waxing from $110 upwards to pedicures for $260, indulgent facials, and massages and body treatments which range from $335 to $705. The top end package is the $960 Chedi Indulgence, which includes a foot polish, foot massage, Thai facial, massage, body scrub and flower petal bath. At least two more leading hotel chains are preparing to open five-star hotels near Chiang Mai over the next two years and, according to The Chedi general manager Eleanor Hardy, the appeal of a spa in the heart of the city is clear. 'Here, you see real life. You walk into the street and see street vendors. People are doing their daily thing, not just for the tourists. They are doing what they always do,' she said. 'Guests can feel the sense of community - but at the end of the day, they can come back here to a little haven of tranquillity and luxury.'