Compared with its gigantic South American neighbors, Argentina and Brazil, Uruguay may lack size, dramatic landscapes, and cultural and natural diversity. Still, it's found a niche on the international tourist circuit with its beaches—inundated by Argentine celebrities and fashion shows in the summer months of January and February.
Uruguay also has subtler attractions such as the 17th-century colonial town of Colonia del Sacramento and the underrated capital city of Montevideo. Its rolling interior, dotted with estancias (cattle ranches), many of which house guests in stylish comfort, is still gaucho country.
Uruguay's people, almost entirely of Spanish and Italian ancestry, are, along with Chile, unique in South America in that they are mostly middle class—there aren't the extremes of wealth and poverty that plague much of the rest of the continent (a legacy of the country's progressive social services). As a result, the nation enjoys a relatively high standard of living and literacy, though Argentina's economic turbulence and continued uncertainty have impacted the tourist economy when Argentines, with their devalued pesos, have been unable to travel across the Rio de la Plata.
Today, however, Uruguay is very much a touted destination among in-the-know travelers. Tourist arrivals have been growing, and tourism is now the largest sector of the country's economy. Travelers are also extending their previously brief visits to the country in order to savor its sublime beaches, art-deco architecture and genuine old-world charm.
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