Uruguay Town Becomes Hip New Vacation Spot

JOSE IGNACIO, Uruguay (TheStreet) -- In January, South Americans migrate to seaside playgrounds such as Brazil's Florianopolis or Mar del Plata in Argentina for month-long vacations. For the past year, the sleepy coastal town Jose Ignacio in Uruguay has dominated the travel magazines by attracting boldface names.

There are no stoplights in Jose Ignacio, which sits at the tip of a peninsula that's 40 kilometers north of Punta del Este. There's only one grocery store and barely a coffee shop. The town is six streets wide, with few buildings taller than two stories. The place falls asleep after 9 p.m. and hibernates from March to December.

Up until two years ago, there were three hotels to choose from, including the Posada del Faro, which sits on the peninsula's southern side, surrounded by mega-mansions. However, a gleaming new luxury hotel called Playa Vik is scheduled to open in March, a sister property of the Estancia Vik, which opened last year.

Just a few streets over is another new hotel, the Casa Chic, which offers apartment-style rooms around a sleek pool with an all-white design. The hotel seizes on the true beauty of Jose Ignacio, which lies in its walkability.

Locals can enjoy the packed beach club scene at La Huella by day and then walk almost-deserted streets at night. It wasn't long ago that La Huella occupied a lonely spot along a dead-end road, but now it shares an expanding cluster of buildings with shops and fine restaurants.

Hollywood is part of the new glitz. Restauranteur Adolfo Suaya, the man behind the Los Angeles hot spots Geisha House and now-defunct The Lodge, has opened the resort Casa Suaya and its restaurant Butia.