With some seriously cool beach spots and striking hotels leading Latin America in the design stakes, the country is doing a pretty good job of answering that question all on it's own.
An introduction to Uruguay
Having just returned from my trip to Uruguay, I can officially say that the perception that the country is a bizarre choice for a luxury holiday couldn't be further from the truth. I confess to having thought this myself initially, but my view has totally changed.
Uruguay is a country with 3.5 million inhabitants - three times the size of England - located between Brazil and Argentina. The landscapes vary from pristine beaches to beautiful countryside of rolling hills and vast plains of cattle grazing pastures. There's colonial history, a growing wine industry, and hotels catering to the most demanding and wealthy traveller, the boho chic surfer to the riding enthusiast looking to experience a day in the life of a gaucho.
As I journeyed from west to east, visiting the historical quarters of Colonia, the wine estates in Carmelo, the farm estates in the interior and ending on the beaches in the east of the country, I warmed more and more to what Uruguay had to offer. What the country's tourism industry may lack a little in service, it makes up for in beauty, good food and wine, outstanding hospitality and a lot of fun.
If you are looking for a riding experience, I can recommend some charming homely farm houses. Here, you'll find yourself rounding up cattle with a man named Alejandro, crossing lagoons, galloping through forests and wetlands.
If it's beaches - perhaps a spot of surfing or kite-surfing - you're after, head to José Ignacio for the best boutique hotels and cuisine to die for. Otherwise, La Barra has some more understated hotels, if you prefer to get stuck in to the nightlife and party culture. The more well-known resort of Punta del Este is thirty minutes down the coast.
Be aware that that seasons starts mid-December and ends in March. Out of season, the towns are quiet, the beaches are empty (sounds ideal!) but most restaurants are still open. The weather, however, is not so reliable.
Travelling to Uruguay
I suggest adding Uruguay onto a holiday in Argentina. However, if it's riding and beaches alone that take your fancy, then skip Argentina and head straight to Montevideo (Uruguay's capital city) with Air Europa or Tam (via Madrid or Sao Paulo).