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Aside from wandering around and shopping the outdoor markets , there are few noteworthy tourist attractions in Otavalo, although the surrounding towns, villages, and countryside are ripe with opportunities for sightseeing, shopping, and adventure activities.

Learn the Language -- If you want to learn some Spanish, check in with the Otavalo Spanish Institute, Av. 31 de Octubre 476 and Juan de Salinas, 3rd floor, which offers a variety of intensive plans with one-on-one instruction, a home-stay with a local family and three meals daily, and various extracurricular activities (tel. 02/2921-404; www.otavalospanish.com). They even offer classes in Quichua. Rates run $190 to $270 (£127-£180) per week, depending upon the number of hours of study per day.

In Town

If you tire of the hustle, bustle, and commerce of the artisans market on the Plaza de los Ponchos, head for the more peaceful Parque Bolívar. You can grab a bench in the gardens here, or venture into the city's main Catholic church. Although very plain from the outside, the church features a small but ornate gold-leaf and gold-painted altar, as well as a pretty tiled ceiling.

To learn about the process of weaving used by the artisans in and around Otavalo, head to the Museo de Tejidos El Obraje (tel. 06/2920-261), which was set up by Don Luis Maldonado and his wife, and has exhibits about the local weaving tools and techniques, as well as displays on the daily lives of the Otavaleños. This little museum is located on Calle Sucre 608, just across from the Sana Sana pharmacy. It is open Monday to Friday from 2 to 5pm and weekends from 9 to 11am. Admission is $2 (£1.35). They also offer classes on weaving.

On the campus of the University of Otavalo, just north of town across the Pan-American Highway, is the Instituto Otavaleño de Antropología (Otavalo Institute of Anthropology; tel. 06/2920-461), which has a modest collection of archaeological relics and finds, as well as a library and bookshop. But I recommend that you spend your precious time enjoying the other sites and activities around town, and get your archaeological fix at the Museo Nacional del Banco Central in Quito. The institute is open Tuesday through Friday from 9am to noon and 2:30 to 6pm, and on Saturday from 9am to noon. Admission is free.

Otavalo Market -- Because there are often several, simultaneous markets taking place, it's probably most accurate to talk about Otavalo's "markets." The artisans market presents some of the best bargains in Ecuador and, just as importantly, some of the best people-watching. On Saturday, almost the entire city becomes one big shopping area, and itinerant vendors set up stalls on every available speck of sidewalk and alleyway. It's not just for tourists, either; Ecuadoreans come here from miles away, to peddle and buy high-quality, handmade goods. The Otavaleños are extremely friendly and helpful, and they wear beautiful traditional clothing. Overall, this is one of the most colorful markets in Ecuador, and the handicrafts are of excellent quality.

Some of the most interesting buys available here include handmade alpaca sweaters, soft alpaca scarves, wool fedoras, colorful straw bags, hand-embroidered blouses, ceramics, tapestries, fresh pineapple, and llamas. Yes, llamas. Early in the morning on Saturday, there is an animal market, where you can exchange your cow for a llama or simply buy a dozen chickadees. To get to the animal market from the main plaza, walk down Sucre or Bolívar to Morales. Take a right on Morales and walk straight for about 5 blocks and cross the bridge. Turn right after the bridge and then take a left at the next main street. The animal market is about a half-block up. Get here early (around 7 or 8am) because the market closes down at 10am. There is also an excellent fresh-produce market on Plaza 24 de Mayo.

Though Saturday is market day, there is a relatively complete market every day on Plaza de los Ponchos. Whenever you visit, you'll find the same great crafts on sale here, and the same beautiful people selling them. Tip: I find that the Saturday market is a bit overwhelming; in fact, I prefer coming on a Wednesday or Sunday, when the market still has great variety, but when I don't have to visit innumerable stands to be sure that I have found the perfect bag or hat. You might also be able to bargain better on an off-day, as fewer tourists mean less demand and sellers are often a bit more flexible if they really want to make a sale.

Shoppers should expect to do some bargaining, but I've found that prices will only drop a dollar or two (or 20% at most). Don't worry -- the asking price is usually quite low, and everything here is already a bargain.

Exploring the Area

Many of the textiles and crafts sold in Otavalo's markets are produced in the towns and villages nearby. Outside Otavalo, you can visit weavers' studios in Peguche, leather shops in Cotacachi, and woodcarving workshops in San Antonio de Ibarra.

Nature lovers should also take note: With snow-covered Volcán Cayambe overhead and green mountains in the distance, Imbabura province is a place of stunning beauty. There are several excellent hiking possibilities in the area, including one from Otavalo to the Peguche waterfall, and a 4-hour hike around Cuicocha, a picturesque crater lake. All the travel agencies and tour desks in Otavalo can arrange hiking, trekking, and horseback-riding excursions to a range of beautiful and off-the-beaten-path spots in the area, as well as guided tours to the towns and artisans workshops all around outlying towns and villages.

Runa Tupari Native Travel, located right on Plaza de los Ponchos between Sucre and Quiroga (tel. 06/2925-985; www.runatupari.com), and Dicency Viajes, on the corner of Sucre and Colón (tel. 06/2921-217), are the two best agencies in town. Both offer a wide range of tours, hikes, and adventure activities around the area, including guided tours to all the sites and destinations listed below as well as organized climbs of Mount Cotacachi (4,939m/16,204 ft.).

Cuicocha Lake -- Cuicocha is a sparkling blue crater-lake formed about 3,000 years ago, when the crater of the lake's namesake volcano collapsed during an eruption. The crater was covered with snow, which eventually melted and formed the lake. When the Incas came here, they thought that one of the islands in the middle looked like a cuy (guinea pig), hence the name Cuicocha (Guinea Pig Lake). You can take a motorized boat ride out and around the two islands in the middle of the lake, although you can't get off and hike on them. From the boat, along the shores and in the shallows, you will see totora, the reed used in this area for making baskets and floor coverings. A 20- to 40-minute boat ride should cost no more than $3 (£2) per person. Be sure to bring a warm sweater -- the wind here can be vicious.

I prefer hiking here to riding around on a boat (although you can certainly do both). An 8km (5-mile) trail loops around the rim of the crater, which takes about 4 hours to circle. But even if you walk along it for only 5 or 10 minutes, you'll be able to see Otavalo, Cotacachi, Cayambe, and all the volcanoes of Imbabura province. The setting and views are consistently striking. There's a small visitor center, near the end of the road leading from Quiroga to Cuicocha, which has some basic exhibits on the geography, geology, and local history of the lake, and serves as the administration center for this entrance into the Cotacachi-Cayapas Ecological Reserve, of which Cuicocha is a part. Admission is $1 (65p) to visit the lake, $5 (£3.35) to visit other areas of the reserve.

Cuicocha Lake is located about 16km (10 miles) west of the town of Cotacachi. Although a paved road leads almost to the crater's edge, no public transportation is available from Otavalo directly to Cuicocha.

Tip: I recommend taking a guided tour here, as robberies of unaccompanied tourists have been reported. If you're doing it on your own, it's best to hire a taxi in Otavalo for the full trip, or to take a bus from Otavalo to Cotacachi or Quiroga, and then hire a cab. If you hire a cab, be sure to either pay for the wait time, or designate a time for your return ride.

Cotacachi -- Known as the Ciudad de Paz (City of Peace), Cotacachi is a sleepy little pueblo with incredible vistas. From here, you can see snow-covered Volcán Cayambe and the lush green mountains in the distance. But no one comes here for the views, because Cuicocha, about 10 minutes up the road, offers much better views -- perhaps the best in all of Imbabura province. People do, however, come here to shop. Cotacachi is famous for the leather stores that line Avenida 10 de Agosto. Offerings range from wallets and purses to shoes and clothing. Equestrian enthusiasts can shop for handmade saddles. The quality varies widely, but if you search hard enough you are bound to find some excellent work and great bargains. There is also a small museum here, Museo de las Culturas (tel. 06/2951-945), García Moreno 13-41, in the center of Cotacachi, which exhibits ethnographical, historical, archaeological, and musical pieces from the region. It's open Tuesday to Friday 9am to noon and 2 to 5pm, and Saturday 2 to 5pm. Admission is $1 (65p). Cotacachi is about 15km (9 1/3 miles), or 15 minutes, from Otavalo. You can easily take a public bus from the station in Otavalo, or hire a taxi for about $6 (£4) each way.

Peguche -- Peguche is home to some of the best weavers in Ecuador. If you stop in the main square, you can start off by visiting the gallery and workshop of José Cotacachi, a master weaver. Peguche is also famous for its musical instruments. You'll find various shops that specialize in making single-reed flutes and rondadores (panpipes), as well as guitars and charangos (a mandolin-like instrument with five pairs of strings). Traditionally, the back of a charango is made from an armadillo shell. If you visit the town on a guided tour (which I highly recommend), you will explore the back streets of Peguche and visit the homes of some of the town's best weavers, while also learning about the old-fashioned process of spinning wool.

Just outside the town is Peguche Waterfall, a popular spot for tourists and locals alike. Peguche Waterfall is a tall and powerful torrent of water with lush vegetation on either side. Near the foot of the falls you'll find broad grassy areas with picnic tables and bench seating. Paths take you around the area, including one that goes to the top of the falls, with a sturdy wooden bridge taking you directly over the rushing water. The Peguche Waterfall plays an important role each year in the concurrent festivals of Inti Raymi and San Juan de Batista, which coincide with the summer solstice. Locals of both indigenous and Catholic faiths come to the falls for ritual baths at this time of year. If you fancy staying overnight or simply stopping for a bite to eat right in Peguche, check out Hostal Aya Huma (tel. 06/2690-333; www.ayahuma.com), which has rustic rooms, serves up traditional and international cuisine, and holds spiritual cleansing workshops. Slightly more expensive and comfortable is La Casa de Hacienda (tel. 06/2690-245; www.casadehacienda.com), with cozy cabins, a good restaurant, and a tour desk. It's located off a well-marked turnoff 3km (2 miles) north of Otavalo, along the Pan-American Highway, very close to, but a little bit north of, Peguche.

This tiny town is located about 10 minutes by car from Otavalo. A taxi should cost $5 (£3.35) each way, and you can also walk to the falls from town in about 45 minutes. The route is well worn and popular; just ask one of the locals to point you in the right direction.

Mojanda Lakes -- After Cuicocha Lake, the Mojanda Lakes offer some of the best and most scenic hiking around Otavalo. The extinct Volcán Fuya Fuya stands majestically above the three high mountain lakes, creating a beautiful setting. This is a great spot for bird-watching -- more than 100 species of birds are found here, including the giant hummingbird and the endangered Andean condor. Mojanda Lakes are located about 30 minutes south of Otavalo. A taxi here costs about $12 (£8) each way.

Parque Condor -- Although you'll find Andean condors on display here, you'll find a whole host of other bird species as well. The emphasis is on raptors, with a variety of local raptor species represented, including various different owls. Several large birds are brought out by trainers and allowed to fly each day at 11:30am and 4:30pm. The park is set on a high hillside with a lovely view over Laguna San Pablo, the Otavalo Valley, and Volcán Imbabura. There's a small restaurant with great views, as well as a children's playground.

Parque Condor (tel. 06/2924-429; www.parquecondor.org) is located outside Otavalo near El Lechero and Peguche. It is open Tuesday through Sunday from 9:30am to 5pm. Admission is $2 (£1.35). A taxi ride here from Otavalo should cost no more than $4 (£2.65) each way.

Intag -- This is a region of beauty and conflict. The hills, mountains, valleys, and ravines here are covered in rich cloud forests, and they're home to a wide array of wildlife and hundreds of bird species. Small communities get by on subsistence farming and coffee production. But large mining interests, led by Ascendant Copper, have their eyes and heavy machinery aimed at the mineral wealth that lies beneath the ground, and the Intag region has been ground zero for a tense and sometimes violent clash between local activists, environmental organizations, and Ascendant Copper. The Intag Cloud Forest Reserve (tel. 06/2648-509; www.intagcloudforest.com) is owned and run by Carlos Zorrilla, who has been a leader in trying to preserve the environment and ecosystems here. The bird-watching is phenomenal, and Carlos and his crew are great guides. Accommodations are available in rustic rooms inside the reserve. Water is heated by passive solar energy, and all meals are vegetarian. Depending on the size of your group, rates run around $45 (£30) per person per day, including three meals and a guided hike daily.

The Intag Cloud Forest Reserve is located several hours, over rough dirt roads, from Otavalo. You absolutely need a prior reservation to stay here, and they aim for a minimum of eight people in a group. When making your reservation, Carlos and company will arrange transportation, or give you detailed information on how to arrive in your own vehicle or via public transportation.

Those looking to volunteer or help out with the conservation efforts should contact DECOIN (www.decoin.org), an organization that works closely with indigenous communities in the region on a range of environmental and social issues, including mining and sustainable tourism.

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.