Even with the US dollar worth only 67 Euro cents, and travel prices rising from soaring fuel costs, Portugal still offers a world-class travel experience at costs comparable to those at home.

Imagine a city – make that a country – that is the image you’d always pictured of Europe. Stone-paved streets wind up a castle-crowned hill, opening to belvederes with views to a broad river. Yellow streetcars rattle through grand plazas enclosed by elegant arcades. Locals and visitors mingle in the laughter of sidewalk cafes, and you can buy a nosegay of violets or a paper cone of roasted chestnuts from street vendors. That’s old Lisbon.

Old and 21st-Century Europe
Maybe your vision of Europe is a 21st-century one, where the bold lines of cutting edge architecture stand against the sky and design hotels welcome you to Euro-sleek surroundings. That’s new Lisbon, and the two mingle and mix in a blend that charms the lovers of both.

Lisbon is at the same time a pulsing modern capital and the epitome of the Old Europe we all thought we were born too late to see. And happily, one of the things that have not kept up with 2008 European trends is the pricetag. Imagine a sparkling new and luxurious hotel room at the Hotel Bairro Alto, overlooking the square at the center of Lisbon’s most central and atmospheric neighborhoods, where you eat breakfast on a rooftop terrace overlooking the Taugus River – for $400 a night.

Or a newly-restored room in the grandest of the elegant old palace hotels, the Avenida Palace, at the heart of the lower city, in the same price range. Pay less than half that -- $185 a night for a room in the brand-new Jeronimos 8, a smart and sassy design hotel within a three-minute walk of the city’s best museums and across the street from its knock-out UNESCO World Heritage monastery.

Outside of Lisbon
These are the “high” city prices, and the cream of upscale hotels in the capital – the kind that cost twice those rates in Paris, Berlin, London or Rome. Move out of the city, as we do, to savor the beautiful landscapes and seashores, to climb the walls of deserted castles in hilltowns overlooking the Spanish border. Explore the vineyards along the steep banks of the Douro Valley, where next year’s vintage of Port wine is ripening in the sun. Stay in the great wine estates and sample the wines with the owners in the evening. Arrange these visits through Solares de Portugal, and don’t be surprised when you are welcomed by the owner in person – that’s part of the hospitality expected in Portugal.

The Count of Calheiros strode across the garden-encircled portico of his ancestral palace to open my car door, and that evening we dined with him and his wife in the same diningroom that had welcomed kings. The cost of a room and breakfast there? $160; the view across his vineyards to the Roman bridge in the heart of the Medieval town of Ponte de Lima, and the stroll in the terraced gardens just outside our private entrance were free.

There is so much more to Portugal – the golden cliff-lined beaches of the Algarve, the grand palaces and monasteries, the Art Nouveau neighborhoods, the stunning new neighborhood in the old dockyards, the olive groves and cherry orchards, the postmodern architecture, the morning markets and Lisbon’s bright young chefs. So much more, and all of it at affordable prices.