Set in a valley in the northern Andes, Otavalo is right at the top of any Ecuador traveler's must-see list, famous throughout South America for its weekly Otavalo market, where one can find an overwhelming variety of Andean crafts. It is reportedly the biggest of its kind in Latin America. Every Saturday from about 8 a.m., the local craftsmen pour into the town and unfold their wares along Plaza de Ponchos and in the surrounding streets, the whole area exploding into a hodge-podge of colourful rugs, clothes, paintings and other crafts. There is also an animal market early on Saturday mornings which is worth a visit.
During the week, Otavalo is a sleepy little town, which can be hard to believe if you've seen it during Saturday’s mid-market frenzy. Architecturally, it is mainly modern (if you count 1960's and 70's vintage cinder block as modern), although there are a few colonial buildings left, mainly at the southern end of town around the Plaza Bolívar. There are also a couple of museums that are worth a peek, including the Instituto Otavaleño do Antropología. But apart from a small daily crafts market in the Plaza de Ponchos, there's not much going in the town, and Otavalo hotels and restaurants are often empty, particularly in low season. Nightlife is virtually nonexistent during the week, although there are a few good live music venues, usually traditional Peñas that play Andean music and are open on Friday and Saturday nights.
However, despite its quietness – or perhaps because of it – many travelers opt for an extended stay here, often to study Spanish for a few weeks, or to explore the area surrounding Otavalo with its lakes, waterfalls and ancient Incan trails that weave in and out of the mountains.