About 1.5 to 2 hours by bus from the Carcelen bus terminal in Quito, a little past the lake with the volcano backdrop is the town of Otavalo. Famous for its weekend market that fills several city streets, Otavalo is full of color. There are some markets running each day, however the weekend market is the one Otavalo is known for, primarily hosted by the indigenous people of Ecuador. Loaded with handcrafts of all sorts from alpaca blankets and sweaters to jewelry made of the tagua nut and native woods, to paintings and clothing, the streets are full and colorful with the aroma of various street foods wafting through the air. Name brand and copies of name brand clothing and shoes are abundant as well, but who wants to visit a famous market in Ecuador for brand items? Walk the entire market and negotiate a bit on prices before purchasing. Then make the rounds again in the late afternoon. The bargaining is friendly and non-aggressive, and bargains are to be had on pretty much anything. Only a 25 cent bus ride, less than a half hour away, is Cotacachi, a small village known for it’s leather goods. We walked the Otavalo market in the morning, took the bus to Cotacachi and did a little shopping, then returned to start filling our bags. Some of the interesting items found include jewelry made of dried orange peels and the seeds from the large tagua fruit, as well as hand crafted instruments and clothing. 
The town central of Otavalo itself is clean and colorful, with the churches and waterfalls lit up at night with accents of blue, green, and purple, with decorated street lamps. The old style street 
lamps are adorned with stained glass designs. Plenty of bread and pastry shops fill the air with sweet scents. Although not Ecuatoriano, there is a pretty good Mexican restaurant on Avenida Piedrahita by the name of Chimichangas (Simon Bolivar y Vicente Piedrahita), colorful with interesting art on the walls, where two dinners, a desert and cocktail or beer will run a total of about $11-$15. A number of hostels and a few hotels are within 2-6 blocks or less of the central plaza. We spent two nights at Hotel Chasqui, with a rooftop kitchen and balcony overlooking the valley, and only a few short blocks of town central (click here on Otavalo Lodging for more on the hotel).
