2 Best Hotels in Castro, Chiloé

Looming over downtown near the estuary, this hotel has a sloped chalet-style roof with a long skylight, which makes the interior seem bright and airy even on a cloudy day. Designed by one of Chile's most important architects, Emilio Duhart, and built half a century ago, the structure underwent significant remodeling in 2008 and added a new wing, with 20 suites and a spa. If you're willing to pay about 40,000 pesos more, those suites are worth the upgrade—twice as big as a double room in the old building and with better views and modern beds and furnishings. The restaurant has huge windows with great views of the Golfo de Corcovado. The hotel also has a disco that opens on weekends.

A renovated palafito (traditional stilt house) in the Gambo neighborhood, this hotel inside Castro is a small, quiet alternative to the bigger, luxury options in the area. There are great views in an attractive, well-lit building with large, plated windows and native wood from floor to ceiling. The hotel consistently wins rave reviews for its cleanliness, service, and overall ambience.