The best accommodation near the lakes – and one of the most peaceful hotels in the region – is Casa Mojanda, 3.5km up Mojanda road from Otavalo (t 09/9731737, w www.casamojanda.com; over $121), a collection of beautiful whitewashed cottages poised on a hillside, with stunning views of the Imbabura, Cotacachi and the Cushnimuri mountains. Run by an American–Ecuadorian couple, the hotel features an organic garden that supplies delicious produce for its largely vegetarian restaurant, and a portion of the profits goes to the Mojanda Foundation, supporting progressive educational and environmental initiatives. Many of the cottages have their own fireplaces and the price ($200 a double, with tax), includes breakfast, afternoon tea and dinner. Among the other perks are an outdoor Japanese-style hot tub, games room, piano and library, plus guided horseriding tours ($25 per two hours) and hiking expeditions. There’s a cheaper “dormitory” for large families, and discounts for children and nationals too.
A little further up towards the lakes on a side road, La Luna (t 09/93156082, http://www.hostallalluna.com/; $16–25) is a good choice if you’re on a budget but desire a relaxed and attractive hotel outside Otavalo. It features comfortable rooms with or without private baths and fireplaces, as well as dorm beds ($6), and a campsite ($3). Buses for La Luna leave Otavalo (Mon–Fri 1pm & 6pm) from Piedrahita and Jaramillo, or a taxi costs $3.