Lisbon

The hodgepodge of historical periods and cultures represented in Lisbon, Portugal, is a major source of its charm and travel appeal. A sprawling city on the banks of the Tagus River, Lisbon constantly reminds travelers that Portugal has been conquered several times, that it developed (and lost) its own illustrious empire and that, for much of the 20th century, it isolated itself from the rest of the world.

But when Portugal joined the European Union in 1986, it experienced a major economic boost. A completely new quarter sprang up on the banks of the Tagus. Lisbon is modernizing fast as a European travel destination.

As visitors to Portugal walk Lisbon's hills—or, better, take one of Lisbon's vintage trams—they'll find restored medieval facades, wonderful art-nouveau buildings, black-and-white mosaic sidewalks (known as calcada), fine museums and plenty of modern shops.

Lisbon's citizens seem to have absorbed their city's many-sided character. Visitors can witness the popularity of fado, the melancholy music that developed in Lisbon in the early-19th century. Though the performers sing about tragedy and distant glory, the audience is very much a part of modern Lisbon—a flourishing, fashionable business and leisure center.