On the southern tip of Uruguay, a tiny fishing village is gaining a reputation as South America's most chic outpost. Mark C O'Flaherty rubs shoulders with the rich and beautiful in José Ignacio
• Mark C O'Flaherty
• The Observer,
• Sunday April 20 2008

At first I wanted the one on the left, just after the bridge from La Barra, the one that looked like a stone-clad, rustic Moon base. Then I wanted the one on the right, which looked like an outlandish boutique in Tokyo's Omotesando fashion district but with a nuclear fallout shelter on the back. Then I saw the one with the vast Alice in Wonderland lampshades on the porch ... Decisions, decisions.
Drive east out of Uruguay's Punta del Este peninsula and eventually the bland tower blocks of this party town give way to a strip of the most incredible low-rise fantasy holiday homes anywhere: elongated, cubist, minimalist. Welcome to José Ignacio, the minuscule fishing village which is fast gaining a reputation as the Hamptons of South America.
Sun, surf and sand seldom come with more attitude: this is a world where Naomi Campbell nibbles nigiri sushi opposite Ralph Lauren at lunchtime, and a town which sent muffin baskets round to Shakira to welcome her to her new home just as it bade farewell to Martin Amis and Isabel Fonseca.
José Ignacio is where the beau monde of South America come to hang out until the end of April before jetting off to Europe or the US to chase the sun. High-profile Argentines come here in droves on the Buquebus ferry across the River Plate from Buenos Aires, or via a short-hop flight.
But in recent years overseas visitors have been waking up to its low-key charms. José Garcia Arocena is the owner of La Posada del Faro, a 14-room hotel with whitewashed artisanal bedrooms. José has seen a lot of changes since he first set up in 1991. 'When I first came,' he says, 'Punta del Este had already been glamorous since the 1940s, but José Ignacio didn't even have running water.'
A decade later, José's hotel was put on the map when it was included in Herbert Ypma's Hip Hotels guide, bringing José Ignacio to the attention of a whole new kind of traveller. 'About three or four years ago we saw a big change,' recalls José. 'We started seeing people from New York and London coming. Now about 12 of the 14 rooms are always occupied by people from outside South America.'
The latest stylish place to stay, Casa Suaya, is owned by Adolfo Suaya, a Los Angeles restaurant mogul, who is building stone-clad chalets in the grounds of his private home. He was already playing host to Lear-loads of visiting friends, so he decided to turn it into a commercial proposition. Casa Suaya is a good signpost for the way the rest of José Ignacio is going.
Though José Ignacio is a playground for the wealthy, this isn't an Indian Ocean resort or Côte d'Azur beach club - there are no extravagant infinity pools or luxury hotels with corps of uniformed cocktail wallahs. The beach itself is a long and fine one, with South Atlantic breezes cooling the heels of groups of novice surfers in wetsuits and ladies being massaged in the thatched treatment hut close to the lighthouse.
José Ignacio may be low key and discreet, but it's relentlessly and shamelessly snobby. Want a lunchtime table at the sole seafront restaurant, La Huella (00598 486 2279; paradorlahuella.com) but haven't booked? Then go beg the lady with the clipboard, while others swan past to join the cocktail-swilling vacationers swathed in white linen on the porch. For even more exclusivity, ask the staff about their sister property, Caracola - a tiny all-inclusive $130-a-day beachclub on the Garzón lagoon, accessible only by rowboat and for those with an invitation and reservation. Smile, be nice and look the part: if they like you, they'll give you the number.
I'd heard wonderful stories about Marismo (00598 486 2273), the 'secret restaurant' where you eat barefoot in the sand surrounded by flaming torches. You have to look for a long blue wooden fish on the left as you drive along the dirt road towards the Garzón lagoon and then use a torch to find the entrance. I arrived half an hour late, having accidentally wandered into a private home in the surrounding woodlands. On arrival I expected a little of the legendary South American laissez faire attitude towards tardiness but the hostess was having none of it. I was made to wait another 40 minutes and was then seated in Marismo Siberia - right by the bar.
There isn't a plethora of dining options in José Ignacio - apart from Namm, which serves so-so sushi and fusion cuisine in groovy beach huts, and the aforementioned La Huella and Marismo, you have to drive out to celebrity chef Francis Mallmann's Garzón if you want something spectacular on your plate.
Garzón is mad genius Mallmann's fantastic folly - a hugely expensive (£80 a head) restaurant attached to a tiny boutique hotel fashioned out of an old general store in a genuine ghost town, complete with abandoned railway station and cattle bones scattered in the dirt. You have to endure a 30-minute drive on a dirt track to get there, but the food is to die for. To get the best out of Garzón, stay a couple of nights. The bedrooms are wee but chic, with a monastic-meets-boho design. If you're staying here, food and wine are included in the rate, and if you're here, you may as well stay because it's a bugger to get back to the coast after dark.
Mallmann's long-term projects for Garzón, including luxury tents with butlers and the conversion of an overgrown Gustave Eiffel railway bridge into a cocktail bar, are unhinged but inspired.
Back on the coast, there used to be just a couple of posadas to stay in, but the scene is developing: a stretch of coast with 'Setai' flags planted in the sand announces the imminent arrival of an outpost of Miami's most luxe hotel. For now, hotel rooms are few and far between: there's Suaya, Garzón, Posada del Faro and the hippy-chic Posada Paradiso, run for 19 years by Irene Abadi, the perennially barefoot landlady, and her artist husband Gonzalo. There's relatively little posing at Paradiso: the main event is Irene's famous paella evening. It's an informal, spirited, hair down, let's-make-friends kind of a place.
Despite its designer boutiques and interior design stores, the village is still very much a backwater. The nearest cash machine is a solid half-hour drive away. Most of the nearby roads aren't really roads, and one of the best ways to get a feel for the landscape is to go on a sunset horse ride from the middle of the nearby pampas down to the seaside, on one of the Haras Godiva stables group outings (00598 480 6112; harasgodiva.com).
For all its posing and grooming, there are no nightclubs - the only flashing lights along this coast are the glowworms strobing across the grass at dusk. And after dark, the ambient music was replaced by the sound of crashing waves and a few outbreaks of house party-style chatter by whichever pool I happened to be at. This may be one of the most fabulously self-conscious seaside resorts in the world right now, but it's never anything less than impeccably well behaved, and unlike the all-night hedonism to be found a short drive along the coast, José Ignacio does like its peace and quiet. For now, anyway.
Essentials
Mark C O'Flaherty flew to Buenos Aires with Air France (airfrance.co.uk) via Paris. Fares from £610 return. The Buquebus ferry (buquebus.com) from Buenos Aires runs throughout the day, from £35.Posada Paradiso (00598 486 2112; posadaparadiso.com) has doubles from £80, including breakfast.