Otavalo Ecuador, a small city that's just a two-hour bus ride from Quito, is the place for you if local crafts and product markets are high on your travel priorities. Otavalo is by far the most famous indigenous market in Ecuador. Villagers from surrounding areas have been bringing their wares down from the hills to the Otavalo market for hundreds of years, spending a day filled with bartering, exchanging, selling, and socializing. Today, the market draws huge crowds of locals and visitors every Saturday. Musical instruments, dolls, jewelry, produce, crafts of all sorts -- you'll find it at the market.
Otavalo is especially known for weavings and the people have been accomplished weavers for centuries. You'll discover an array of tapestries and clothes at the market and an almost unbelievable array of colors. A large portion of the market is devoted to tourists, and people flood the streets, making for a circus atmosphere. At a quieter time, you can visit the workshops of the hard-working weavers, working on backstrap and Spanish treadle looms, along with other artisans at work making hats, weaving straw mats, and knitting sweaters.
During the week, the city returns to normal, and people gather on the town square. A few markets operate on a smaller scale, and natives go about their business while visitors look to nearby lake and mountain sites in the beautiful countryside surrounding Otavalo.
You can easily get to several lakes from Otavalo, including Lago de San Pablo just a few miles away. On its shore live many weaving families who celebrate colorful fiestas. About four hours away from Otavalo are three lakes, known as Lagunas de Mojanda. Nestled among rolling mountains, with amazing views of mountaintops from numerous trails and idyllic waterfalls, these lakes have spurned a number of lodges and resorts that offer numerous ways to keep you active outdoors.
At the Casa Mojanda Inn and Farm, for instance, you can immerse yourself in the splendid natural setting by walking, horseback riding or biking on mountain trails. The rooms are spacious and decorated nicely with local furnishings. And each guest visit supports the Mojanda Foundation, committed to ecological tourism and community and conservation projects.
Upon your return to Otavalo, if you want to stay a day or so longer a good choice would be one of the converted haciendas more costly than in-town accommodations, but well worth it. You'll enjoy beautiful grounds, colonial architecture, elegant furnishings and opportunities for expeditions around the countryside on horseback or hiking forays.
Things to avoid: Pickpockets and bag slashers. (Keep your belongings hidden from view and beware that a bag stuffed full of goods is a target, particularly on Saturday night buses returning to Quito.)