Downtown Montevideo, the capital and main port of Uruguay.
Will & Deni McIntyre/Getty Images

Montevideo, Uruguay — long overshadowed by its sexy neighbor: Buenos Aires, Argentina — is  now a desirable destination all its own.

Standing on the terrace of my hotel room in Montevideo, Uruguay, one breezy and balmy night, I popped the cork on a ­bottle of brut from one of the country’s numerous vineyards and beheld the nocturnal landscape. For a dozen miles up and down the shoreline of the Río de la Plata, auto headlights traced the curvature of its riverside highway, as illuminated hotels, restaurants and apartment towers bristled against the dark sky. Judging by the steady activity, I was not the only one who considered the evening still young, though it was nearly midnight.

For me, it was easy to see the city’s wattage as part of a vigorous, optimistic era. During the four days I spent with my family in the Uruguayan capital, I saw and felt and tasted and imbibed the sense that this was ­Montevideo’s moment. The city was emerging from decades of being considered an afterthought among South American­ cities — a ­transit point on the way to the chic beaches of ­Punta del Este, Uruguay; the drab, respectable kid sister to sexy, flamboyant Buenos ­Aires, Argentina, across the Plata. Already endowed with a gorgeous ­waterfront and a talented, educated populace, ­Montevideo suddenly seemed hip — bursting with new boutique hotels, gourmet restaurants, art galleries and espresso bars.
A fruit-and-vegetable store on Perez Castellanos Street in Old Town
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I have to admit to a certain built-in affinity for Uruguay. The handful of my maternal relatives to escape Poland before the Holocaust were taken in by Uruguay when virtually every other country in the Western Hemisphere had closed its doors. But I am an experienced journalist and traveler, too, so when I first visited ­Montevideo in 2003 — doing research for a book about my mother and her family — I was cognizant of its status as a slumping city. The Argentine financial crisis had dragged down its smaller neighboring nation. Relatives and friends spoke of those who had recently left the country for Europe, Israel or America. There was palpable embarrassment­ about the occasional panhandler along the Rambla, the riverfront roadway.

Almost a decade later, Montevideo seems reborn. The economy has boomed with jobs in software, telecommunication, information technology and international trade. Political stability has attracted investment, very much including the tourism industry. The faltering economies in the United States and the European Union have convinced many of Uruguay’s sophisticated young expatriates to come back home. When they did, they brought along cosmopolitan ideas about cuisine, art, shopping and lodging. During my stay in Montevideo, I enjoyed that most smug emotion for any vacationer: the belief that I had found a gem of a place before the rank and file did.

“We’ve been off the radar for most of our lives,” says Francisco Ravecca, a Harvard-educated Uruguayan who is managing director of the Aguada Park free-trade zone. “You would talk to people about Uruguay, and no one would know what you were talking about. But with more people getting down here and experiencing it firsthand, the word of mouth is working. I don’t know when was the last time we had it like this — if we ever did.”

Like many visitors to Montevideo, I combined my visit there with a stay in Buenos Aires and some beach time in Punta del Este. Our four days in Montevideo, full yet unhurried, felt just right for its scale. We arrived on the Buquebus ferry from Buenos Aires, making a serene three-hour passage across the Plata, which is far more like a bay than a river. We departed through Montevideo’s sleek new international airport terminal, which is just one more manifestation of the country’s economic rebound.

Montevideo has long had reliable hotels run by international chains (Radisson, Sheraton), but smaller, hipper, more personalized boutique hotels now abound as well. We stayed at the Cala di Volpe Boutique Hotel, an urbane place drawing an international clientele. Eleven stories tall and with only 72 rooms and suites, the Cala di Volpe combines intimacy with a wide range of services and facilities — a rooftop hot tub and fitness center, a charming restaurant featuring a buffet-style breakfast and free bicycles for exploring the city.