Nicknamed the "Caribbean of Brazil" in honor of its translucent white sands and crystal clear warm waters, Arraial do Cabo is a favorite destination for divers and sunseekers alike and lies just 10 km (6 miles) south of Cabo Frio. The village is surrounded by gorgeous beaches and craggy rock formations—don't miss the Gruta Azul—a 15-meter-tall cave over the blue sea. PADI-accredited dive schools can be found in abundance here, and skippers wait at the harbor to whisk visitors to the best beaches and vantage points, often stopping for lunch at a floating restaurant. The sunsets over the small beach Prainha Pontal do Atalaia are often quite stunning. There's a handful of pousadas here, but there are cheaper and better options in nearby Búzios, which is a quick bus or cab ride away.
Arraial do Cabo, Cabo Frio, 28930–000, Brazil