Ones to watch
(42) The Uruguayan capital of Montevideo, full of Art Deco treasures, is known across South America for its thriving café society. There's also a lively gallery scene along Calle Sarandí in the Old Town. (43) Colonial and Islamic architecture, winding streets, and fabulous shopping make Tunis, capital of Tunisia,a quieter—but no less rich—alternative to Marrakesh. (44)With a grandeur that calls to mind Prague and Vienna, Poland's ancient capital of Cracow is experiencing a renaissance. (45) After years in the shadow of Bruges and Antwerp, Ghent, Belgium, is sandblasting façades and installingnew restaurants, museums, and boutiques.
(41) Panama City
The new hot spot
The recent turnover of the Panama Canal has locals pondering what to do with all those empty buildings the Americans have left behind, and—for the first time in the country's history—how to woo travelers. The government has hired frequent visitor Frank Gehry (his wife is Panamanian) to advise on a master plan for the vacated Canal Zone. Meanwhile, Panama City is fashioning itself as the culturally savvy gateway to a lush and undiscovered land (just outside the capital are pristine rain forests). The hotels are already here, such as Rosewood's colonial-inspired Bristol (Avda. Aquilino de la Guarda; 800/767-3966 or 011-507/265-7844; doubles from $215) and the sleek Miramar Inter-Continental (Avda. Balboa; 800/317-0200 or 011-507/214-1000; doubles from $220). Once you're settled in, get out and shop. Owned by a couturier to Panamanian society, Breebaart (14 Avda. Ecuador; 011-507/225-0830) specializes in beaded dresses. Dante (Calle Cincuenta; 011-507/265-3268) sells guayabera shirts and— the must-have for any visitor—Panama hats. The city is also home to fabulous restaurants. Sample garlic pork chops at Bohío Turístico (Vía Cincuentanario; 011-507/226-5166; dinner for two $15). Café de las Bóvedas (Plaza de Francia; 011-507/228-8068; dinner for two $70), ina colonial fortress, serves French and Thai dishes. Café de Asís (Plaza Bolívar; 011-507/262-9304) makes the best sangria in town. —Raul Barreneche