Lago Llanquihue is the second-largest lake in Chile, a body of clear, shimmering water whose beauty is surpassed only by the 2,652m (8,699-ft.), perfectly conical, snowcapped Volcán Osorno (Orsono Volcano) that rises from its shore. The peaks of Calbuco, Tronador, and Puntiagudo add rugged beauty to the panorama, as do the rolling, lush hills that peek out from forested thickets along the perimeter of the lake. The jewel of this area is without a doubt the 231,000-hectare (570,570-acre) Vicente Pérez Rosales National Park, the oldest park in Chile and home to Volcán Osorno and the strangely hued emerald waters of Lago Todos los Santos.
This splendid countryside and the picturesque, German-influenced architecture of the homes and villages that ring Lago Llanquihue draw thousands of foreign visitors each year. Many adventure-seekers come to take part in the vast array of outdoor sports and excursions to be had here, including fly-fishing, rafting, volcano ascents, trekking, and just sightseeing. Puerto Varas is similar to Pucón, in that it offers a solid tourism infrastructure, with quality lodging and restaurants, nightlife, and several reliable outfitters and tour operators. I urge visitors to lodge in Puerto Varas, Frutillar, or Ensenada instead of Puerto Montt, as these three towns are far more attractive and closer to natural attractions than Puerto Montt. Puerto Octay, about 46km (29 miles) from Puerto Montt, is the most remote lodging option, a sublime little village with one lovely lodge on the shore of the lake.
58km (36 miles) S of Osorno; 46km (29 miles) N of Puerto Montt
Frutillar and Puerto Octay offer a rich example of the lovely architecture popular with German immigrants to the Lago Llanquihue area, and both boast dynamite views of the Osorno and Calbuco volcanoes. The towns are smaller than Puerto Varas and less touristy. For a soft adventure, the towns make an excellent day trip, and the coastal dirt road that connects the two is especially beautiful, with clapboard homes dotting the green countryside -- bring your camera. Apart from all this scenic beauty, there are a few museums documenting German immigration in the area.
Frutillar was founded in 1856 as an embarkation point with four piers. Later, the introduction of the railway created a spin-off town that sits high and back from the coast, effectively splitting the town in two: Frutillar Alto and Bajo, meaning "high" and "low," respectively. You'll drive straight through the ugly Alto section, a ratty collection of wooden homes and shops.
Puerto Octay was founded in the second half of the 19th century by German immigrants; folks in the region know it for its well-stocked general goods store -- the only one in the region -- run by Cristino Ochs. In fact, the name Octay comes from "donde Ochs hay," roughly translated as "you'll find it where Ochs is." Today there are only about 3,000 residents in this quaint little village, which can be reached by renting a car or with a tour (or bus if staying here). Two helpful websites are www.frutillar.cl and www.puertooctay.cl.
A Health Warning -- Every January, this region is beset by horrid biting flies called tábanos. Avoid wearing dark clothing and any shiny object, which seem to attract them; they are also more prevalent on sunny days.