PopulationMetro: 2,715,000
The once sleepy capital on the edge of Western Europe is today one of the Old World’s hottest destinations.

Talk to first-time Lisbon visitors these days and their reaction, through port-stained toothy grins, is one of “Who knew?”

The answer: Those who cared to look.

The sleepy capital on the edge of a continent is a tactile, multi-sensory experience best explored, like so many great ancient centers, on foot with no particular agenda, allowing a few of the 2,799 hours of sunshine a year—the most of any European capital—warm your sense of discovery. Its seven hills—like Rome’s—play with the senses, reverberating sounds, light and scents, to say nothing of providing the perches from which to watch the sun setting the yellow and white architecture—and the Atlantic beyond them—ablaze. To save you some time, the best spot to do so is the Castelo São Jorge, a view you have to earn through winding ancient alleys in one of Lisbon’s—and therefore Europe’s—oldest neighborhoods.

Despite its middle-of-the-pack overall ranking, Lisbon scored an impressive #25 globally in our Place category for these various intangibles not immediately obvious to the cruise ship set. Lisbon performed best in the subcategories of Parks & Outdoor Activities and Neighborhoods & Landmarks, finishing #17 globally in both.

Place 73
Product 26
Programming 16
People 55
Prosperity 27
Promotion 15

Lisbon’s Mediterranean climate is well documented, as is the welcoming spirit of this millennia-old crossroads. But it’s the reinvention of its port and industrial lands, ignited by Expo ’98, that bolsters its much older, pedestrian-focused streetscape and enchants new and returning visitors.

Of course the late-‘90s were a long time ago, with two global equity meltdowns and a European debt crisis making it a tumultuous 15 years or so.

In the Great Recession, Portugal was frequently mentioned in the same breath as Greece, Spain and Italy, with national bankruptcy a real possibility for many months. But the motherland of fado and some of Europe’s most acclaimed 20th-century artists refused to cower under ruthless austerity measures that threatened to gut municipal cultural programs associated with a liveable, expressive, tolerant city. The retreat by the global economy unearthed a new commitment to the locally made, with plenty of abandoned spaces—many centuries old, with an aesthetic and experiential patina that can only be forged by time—to make it.

25 de Abril Bridge Jason Briscoe

For ancient cities like Lisbon, built during a time when placemaking was a point of pride for queens and kings creating built environments for the ages, the parks, citadels, castles and timeless trams were not on the chopping block (but discounted heavily).

The result? Much like artists occupying a derelict corner of town, travelers of the young, broke and Instagrammed persuasion poured in, helping surface the charm of Tram 28, a $5 public trolley that meanders through the city’s famed landmarks and dynamic neighborhoods. Or the panoramic vantage point served up by the Neo-Gothic Santa Justa Lift from the lower Baixa to up to Carmo Square. All of this meandering, sipping, tasting and repeating, don’t forget, still costs half of what it does in Paris or London.

Given this authentic approval by the global cognoscenti, it’s perhaps no surprise that Lisbon is travel media’s darling this year. Travel + Leisure recently named Portugal the 2016 Destination of the Year, with the majority of ink (and pixels) dedicated to the magnetic capital. As they do, several other global media outlets followed suit.

Lisbon Panteao Nacional Portugal in Alfama

The city has been preparing for its moment. Lisbon Humberto Delgado Airport expanded in 2016 to make arrivals and departures more pleasant and accommodate record traffic from U.S. travelers and domestic airlines.

Where tourists go, real estate speculation and luxury development are never too far behind. Luxury properties (at mid-range prices) are harkening back to Lisboa’s gilded past. The Pousada de Lisboa, for example, is housed in the grandiose architecture of the old Ministry of Internal Affairs building.

Santiago de Alfama is the newest five-star hotel in the city, across the cobblestone where Christopher Columbus wed his bride. In keeping with Lisbon’s incredible value, rooms start at $150.

The city’s newly confident culinary scene ranks #34 globally, with three local restaurants awarded their first Michelin star in 2016 and building from there. Today, LAB by Sergi Arola, Loco, Alma, Eleven and Feitoria each boast one star each. Belcanto is the city’s only room with two.