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While Chile may be South America's richest, most stable nation, with a mature democracy and a solid infrastructure that garners a buoyant tourist industry, a sense of dynamism remains, ensuring that each year Chile tops the hot lists for its stellar inventory of world-class hotels, state-of-the-art wineries, and culinary wizardry.

Santiago

The introduction of a new integrated public transport system, known as Transantiago, in 2007 was a fiasco that resulted in transport mayhem for Santiago's rush-hour commuters. Avoiding the Metro during the early morning and late afternoon should allow you to steer clear of any inconvenience, however.

Travelers on a budget have excellent new hostel choices. Andes Hostel (tel. 2/632-9990; www.andeshostel.com) is the sister hostel of the superb Orly Hotel (tel. 2/231-8947; www.hotelorly.cl), which continues to shine as the best midrange hotel in the city, combining European flair with Latin hospitality. Both the Chillhotel (tel. 2/264-0643; www.chillhotel.cl) and Vegas Hotel (tel. 2/632-2514; www.hotelvegas.net) offer a warm ambience and well-maintained rooms in convenient locations that defy their wallet-friendly prices.

The dining trend toward all things fusion continues with the opening of Sukalde (tel. 2/665-1017; www.sukalde.cl), in Providencia, featuring imaginative dishes from globetrotting Chilean chef and TV celebrity Matías Palomo, who studied under food god Ferrán Adria at Spain's El Bulli; plan ahead as reservations are currently hard to come by. Purists will prefer the sleek, minimalist Infante 51 (tel. 2/264-3357), where Basque chef and part owner Xabier Zabala serves platters of unadulterated fish and seafood dishes ranging from white tuna to grilled breca from the Juan Fernandez islands.

Around Santiago

It's worth applauding when a charming boutique hotel comes on the scene that positively oozes style and sophistication. At the moment, accolades should go to the new Zerohotel (tel. 2/211-3113; www.zerohotel.com), a restored mansion with dreamscape views and gratifying attention to detail. Among this guide's notable finds for budget travelers is the artsy Camila 109 (tel. 32/249-1746; www.camila109.cl), which encapsulates the raw bohemian spirit of Valparaíso that has been diluted by the city's gentrification. Valpo continues to blaze the trail in terms of the region's gastronomic kudos.

Newcomers that excel in terms of modern fusion cuisine and jaw-dropping vistas are Concepción, (tel. 32/249-8192) and Montealegre (tel. 2/657-3950; www.hotelcasahigueras.cl).

La Sirena & the Elqui Valley

La Serena is the only town in Chile that still lives and breathes its colonial Spanish heritage. La Serena's rough-and-tumble neighbor Coquimbo has continued to experience a renaissance as a nightlife hub and boasts Chile's biggest outdoor fair, La Pampilla. The beaches at La Serena here have now eclipsed Viña del Mar as the sun-worshippers' hot spot.

As much of the country becomes enveloped by tourism, the Elqui Valley remains an untouched, stunning landscape of pastel-streaked mountains and lush valleys, which unfurl beneath the clearest skies in the hemisphere. Go now while you can still enjoy the solitude and wonderful, affordable accommodations options. The best at the moment is the delightfully holistic Misterios de Elqui, (tel. 51/451126; www.misteriosdeelqui.cl), which offers designer cabins with breathtaking views, a gorgeous pool, and tasty home-style cooking, all for less than $100 (£67) per night.

The Desert North

In the midst of this beautiful "wasteland," in the tiny emerald oasis of San Pedro, two new hotels were unveiled to much fanfare from the travel industry arbiters of style: Awasi (tel. 888/880-3219 in the U.S., 2/233-9641 in Chile; www.awasi.cl) is the ultimate in rustic chic, with stylish rooms and superlative amenities and service; Tierra Atacama (tel. 800/829-5325 in the U.S., 55/555977 in Chile; www.tierraatacama.com) offers more affordable luxury than its iconic rival, the explora. While more and more hotels and backpacker hostels are springing up in San Pedro each year, these tasteful, new adobe and stone constructions blend harmoniously with the landscape and the town has managed, so far, to maintain its low-key, pueblo vibe.

The Lake District

The new dining hot spot in Valdivia is Santo Pecado (tel. 63/239122; www.santopecado.cl), with its funky Pop-art decor and cool lounge scene. Fortunately, this is not a case of style over substance; the menu is as creative and imaginative as the interior design.

In Puerto Varas, Merlin may have closed, but the whimsical Govinda Restaurant & Living Bar (tel. 65/233080; www.govinda.cl) is proving a worthy replacement. The sleek service and charming atmosphere provide a warm backdrop for the delicious Peruvian accented cuisine, best appreciated with a cocktail or one of the Cork artisan beers served on tap.

About an hour from Puerto Montt, the Cliffs Preserve (tel. 888/780-3011; www.cliffspreserve.cl) is a prototype resort from a U.S.-based luxury community development company. The setting, nestled amid primary coastal rainforest, is idyllic. Active excursions, ranging from horseback riding to whale-watching trips, are arranged by qualified guides and naturalists. An additional 12 villas are under construction and are slated to open late in 2010.

One of the world's great small-scale luxury tourism operations, Nomads of the Seas (tel. 866/790-4560 from the U.S., 2/414-4600 in Santiago; www.nomadsoftheseas.com) offers a once-in-a-lifetime cruise aboard the Atmosphere. The astronomical price tag grants you an exclusive tour to the farthest reaches of Patagonia; you will see only the best of the best. Nomads is planning ground operations in the Andes and Atacama in 2010.

Chiloe

The much anticipated Palafitos Hostel (tel. 65/531008; www.palafitohostel.com) has finally opened in the renowned Gamboa district; it perfectly embodies Castro's architectural style with a rich profusion of wood and picture windows that flood the public spaces with light, illuminating the contemporary art decking the walls.

The Carretera Austral

In May 2008, the town of Chaiten was engulfed by the violent eruption of the Chaiten volcano. The town has essentially been destroyed and, at press time, the government was still deciding how best to restore services. There are a couple of ferries that still visit the area and a handful of small inns have reopened, but tourism has ground to a halt. Tentative government plans to rebuild the road to Caleta Gonzalo from Chaiten should enable the southern half of Pumalin Park to reopen for the 2009-10 summer; however, new volcanic activity in February 2009 may cause further delays.

South of Coyhaique, the highway has been improving and tourist traffic has been increasing at a steady clip. Idyllic, off-the-beaten-path towns such as Caleta Tortel and Villa O'Higgins are finally getting their due.

Southern Patagonia & the Tierra del Fuego

Torres del Paine, Chile's crown jewel and most important national park, keeps drawing more and more visitors -- in 2008 the park saw an average of 700 visitors a day, with more than 1,000 during the peak month of January. The most interesting new lodging option here is the Patagonia Camp (tel. 2/335-6898; www.patagoniacamp.com) just outside the park, on the newly opened western access road, which cuts a half-hour off the trip from Puerto Natales into such places as the explora and Hosteria Lago Grey. Inside the park, the traditional Hosteria Las Torres (tel./fax 61/363636; www.lastorres.com) has expanded into a sprawling hotel complex complete with stables and a spa.

In Punta Arenas, the port area is undergoing a major renovation that will include a new hotel and casino, slated for late 2009. In the meantime, the new Hotel Diego de Almagro (tel. 61/208800; www.dahoteles.com) is a good bet right on the shores of the Magellan Straight.

On the Argentine side of southern Patagonia, the tiny trekking hub of El Chaltén now has kayaking and multisport options, and a lovely little inn, Senderos Hostería (tel. 2962/493336; www.senderoshosteria.com.ar). El Calafate continues to sprawl with many sub-standard hotels, but there are a few gems as well, such as the Hotel Edenia (tel. 2902/497021; www.edeniahoteles.com.ar) and the luxurious Casa los Sauces (tel. 2902/495584; www.casalossauces.com), owned by Argentina's President Cristina Fernandez de Kirchner.

On the island of Tierra del Fuego, Ushuaia continues to be a hub for cruise ships, both those rounding the tip of South America en route from Buenos Aires to Santiago, Chile and more expedition-style ones heading to Antarctica. There are, frankly, too many new hotels here, most of which are decidedly mediocre. However, Los Cauquenes Resort (tel. 2901/441300; www.loscauquenes.com), right on the Beagle Channel, is a remarkable exception.

Across the channel in Puerto Williams, Chile, a new hotel called Lakutaia (tel. 61/621733; www.lakutaia.cl) has started selling multiday, multisport adventures in the hard-to-access Isla Navarino.

Easter Island

On the world's most remote island, explora's Posada de Mike Rapu (tel. 866/750-6699 in the U.S., 2/206-6060 in Santiago; www.explora.com), designed by Germán de Sol, opened in December 2007, replacing its smaller incarnation. With stunning, modernist architecture, refined cuisine, and day treks led by native Rapa Nui guides, the new explora offers the ultimate in luxury and opens up a world of unforgettable experiences.

The new owners of Haka Kanu (tel. 32/255-1677), previously known as El Jardin de Mau, have injected a more modern feel to the place. With its infectiously amiable ambience, it's a must-visit for mouthwatering sashimi.

Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.