This tiny resort town hugs the shore of Lago Calafquén, offering toasty beaches made of black volcanic sand and a forested peninsula for a leisurely drive or stroll. The lake is warmer than others in the region and is, therefore, better suited for swimming; you can also rent a boat here. The name comes from Lican Rayén, a young Mapuche woman from the area who is said to have fallen in love with a Spanish soldier. The town was founded as a trading post, and today there are about 3,000 permanent residents, except for the period from December 15 to February 28, when the population doubles with the arrival of summer vacationers. The first weekend in January is the busiest time of year. There's also the Noche Lacustre the second week in February, when the bay fills with boats for a variety of contests and activities, followed by an evening fireworks display. Lican Ray is less crowded and less expensive than Pucón, and during the off-season you'll practically have the place to yourself.
There are a few places to stay here. South German-style Hotel Becker, Manquel 105 (tel. 45/431153; www.hotelbecker-licanray.com), has modest but comfortable rooms, a restaurant, and a deck from which you can enjoy the lakefront view, charging $32 (£21) for a double in the off-season, $60 (£40) for a double in high season (includes breakfast). Hostería Inaltulafquén, Cacique Punulef 510 (tel. 45/431115; fax 45/415813; firstname.lastname@example.org), has good rooms and an even better dining area and deck, and it is ideally located across from the Playa Grande beach; it charges $46 (£31) per double. The hostería is run by two helpful Canadians, who also offer excursions. Another recommended hotel is the German run Hostal Hoffman, Camino a Coñaripe 100 (tel. 45/431109), a small B&B with five basic rooms for $28 (£19) for a double (there's also a restaurant; no credit cards accepted). For dining, try the restaurant at the hostería or Ñaños, General Urrutia 105 (tel. 45/431026), with an extensive menu that offers everything from barbecue meats to clay oven-baked pizzas, and a daily fixed-price lunch for $4 (£2.70). It also has outdoor seating during the summer but no lake view. For visitor information, go to General Urrutia 310 (in front of the plaza). In January and February, the office is open daily 9am to 11pm; during the rest of the year, it's open Monday through Thursday from 9am to 1pm and 3 to 6pm, Friday from 9am to 1pm and 3 to 5pm.
This little town with the impossible-to-pronounce name (try "Pan-gee-poo-yee") is spread across a cove on the shore of its eponymous lake. During the summer, Panguipulli's streets bloom a riot of colorful roses, which the town celebrates in February during the Semana de las Rosas (Rose Week) festival. During January and February, the town holds regular folkloric festivals, art exhibits, concerts, and more. Panguipulli was founded as a timber-shipping port and today has nearly 10,000 residents. The town's primary attraction is its charming church of San Sebastián, at Diego Portales and Bernardo O'Higgins (in front of the plaza). Mass is held from November to February Thursday and Saturday at 8pm, Sunday and holidays 8:30am and 11am; the church is open all day (no phone). The Swiss priest who initiated the building of this church in 1947 modeled its design after churches from his native country, with two latticed towers painted in creamy beige and red and topped off with black-shingled steeples. For visitor information, go to O'Higgins and Padre Sigisfredo streets in front of the plaza (Jan-Feb daily 9am-9pm; rest of the year Mon-Fri 9am-6pm).
The town is better visited as a day trip, but there is a remote lodge here that is a wonderful place to hole up in the middle of a forest and take part in a variety of outdoor excursions. The lodge is the Hotel Riñimapu (tel./fax 63/311388; www.rinimapu.cl), located 27km (17 miles) south of Panguipulli and on the shore of Lago Riñihue. The Riñimapu draws guests from around the world for its fly-fishing, horseback riding, and hiking -- but it is the tranquillity here that encourages guests to really lose themselves in the beauty of the surroundings. The woodsy lodge has 14 simple rooms and three suites, a restaurant, a bar, and a tennis court, and it charges $98 (£65) for a double. To get here, head south out of Panguipulli on the paved-then-dirt road toward Lago Riñihue, and continue for 20km (12 miles) until reaching the hotel; or contact the hotel for information about transfer shuttles from the Temuco or Pucón airports. If you want to stick to the town, try Hotel & Restaurant Le Francais (tel. 63/312496; www.hotelelfrances.cl) at Martínez de Rozas 880, with nine cozy doubles ($70/£47 per night) and a decent French-Chilean restaurant.
At the other, eastern end of Lake Panguipulli, the small Mocho-Choshuenco National Preserve protects the ecosystem of the volcanoes of the same name. A much larger, private preserve, Huilo Huilo stretches south from the narrow lake Pirihueico (the name means "water worm"). The 37m (121-ft.) Huilo Huilo waterfall dropping over a basalt lava deposit and the lower, wider Salto del Puma fall are the park's main features. The Choshuenco Volcano features the only snowboard park open year-round in Chile. Other local activities include horseback riding, zipline canopy riding at lofty, 70m (230 ft.) heights, rafting, and fishing. The private park also seeks to breed the highly endangered huemul, a deer similar to mule deer, and guanacos.
On the road leading to Puerto Fuy near Neltume sit several of Chile's most unique hotels. The aptly named Montaña Mágica (tel. 63/197-2651; www.huilohuilo.cl), or Magic Mountain, looks as if J.R.R. Tolkien himself designed it. A six-sided, cone-shaped little volcano of a stone building, water "erupts" from its summit, cascading down its sides. Each room is named for a different local species of bird and is on a different level as the interior spirals upwards. Each room is also slightly different, but they all have rustic, angular wood-paneled interiors in common. Beds are just a little on the soft side, and if you're tall, you should ask for a room farther down -- it's a bit exaggerated to say the showers near the top are perfect for hobbits, but you get the picture. The restaurant has a similar, woodsy theme, featuring wild boar, and the hotel's service is quite good. Room prices range from $100 to $120 (£67-£80). Set 35 meters in the air amid the forest canopy, the bulb shaped Hotel Baobab (tel. 63/197-2651; www.huilohuilo.cl) has a massive oak tree that runs right through its center and a waterfall that runs down its side. The hotel features 55 artfully decorated rooms that run $110 (£73) per double, all inclusive.
This is also one of the more remote spots to cross into Argentina in the Lake District. By taking the ferry that travels the length of Lake Pirihueico in 1 1/2 hours from Puerto Fuy, you'll cross to tiny Puerto Pirihueco, 11km (18 miles) from the border. From there, the resort town of San Martín de los Andes is another 47km (76 miles) alongside Lake Lacar, another narrow lake, lying entirely in the Lanín National Park. It's a good alternative to the more southern Andes lake crossing, considering it's not nearly as overwhelmed by tourists. Note there's no fuel beyond Panguipulli or Lican Ray. You can also reach Puerto Pirihueco via a secondary road through the Huilo Huilo preserve.