To many travellers, Uruguay is known - if at all - for Punta del Este, the Atlantic coastal beach resort called the South American Riviera by Argentine landlords who have gobbled up the peninsula's seaside real estate.

In good times, that image guarantees steady business for the seafood restaurants and the boutiques that serve the luxury hotels and condominiums.

But being tethered to Argentina's tumultuous economy has its risks, and Uruguay has suffered from financial crises that originated in its larger neighbour.

Of the 1.8 million visitors to Uruguay in 2006, more than half were Argentine. But quietly, Uruguay is developing a second vacation spot that may help uncouple its tourism fortunes from Buenos Aires.

It has found its best hope 3000 feet underground, in the hot springs along the Uruguay River, a once-isolated region that even Uruguayans lump in with the rest of the "interior" anywhere outside Punta del Este and the capital, Montevideo.

Since the discovery of the hot springs in the 1940s, by an oil exploration team wildcatting along the Argentine border, Uruguay has developed an impressively varied string of private resorts, public campgrounds, water parks and dude ranches.

All tap the Guarani Aquifer, the largest in the continent, funnelling its toasty and mineral-rich water into indoor and outdoor baths.

That effort has sparked internal migrations during holiday weekends, when Montevideo, home to nearly half the country's population of nearly 3.5 million, empties. It has also kept the border crossings busy at the Uruguay River across from northeastern Argentina, the route from both Buenos Aires and Asuncion, Paraguay.

But word of the hot springs has not spread far. Americans who make it to Uruguay, mostly on cruise ships, are still almost certain to drop anchor in Montevideo and Punta del Este only.

There is reason to believe, however, that this might be changing. As American travellers trickle across the Rio de la Plata, they are discovering in the hot springs an authentically Uruguayan experience that comes without sacrificing the comforts of the coastal resorts.

Arapey Thermal is at the top end of hot springs lodgings, and it is also the most remote, some 350 miles from Montevideo and with little access to an international airport. But the resort's owners have settled a patch of civilisation in gaucho country.

At check-in, members of the hotel staff slap a cerulean bracelet, the colour of Uruguay's flag, on the wrist of overnight guests, bestowing access to five thermal pools, a movie theatre and tennis courts.

It is also the key to the restaurant, where the culture of the hotel's spa an oasis of hot steam, hot tubs and hot-stone massages gives way to Uruguayan excess.

Sure, there are rice cakes and grapefruit with the cafe con leche at breakfast. But by lunch, all that wading in warm water has built up an appetite, so the buffet is piled high with grilled chicken in orange sauce, with the crispy skin left tantalisingly in place, and hunks of beef and sausage off the parrilla, the traditional grill.

Nor is there pressure to rise with the sun for yoga, not with dinner ending around midnight and guests partying to karaoke in the game room. But just because you can follow your facial with a filet mignon does not mean there is no relaxation.

The indoor and outdoor pools connect beneath a glass divider, and swimmers, like seals at an aquarium, come and go without retreating to their towels.

In the South American winter, the air outside is cool at night, but when a light rain sends up steam from the pool, clouding the planted palms and nearby pasture, the land feels almost tropical.

In Salto, the nearest city, Uruguay has converted former military housing into the Hotel Horacio Quiroga and burrowed into the hot springs.

As at Arapey, the location seems unlikely for a tourist destination, evidence of the hot springs alchemy that has seen tilapia farms materialise in spring-fed ponds and artisanal queso thermal (thermal cheese) factories open in the countryside.

There, as at many of the region's hotels, the hot springs water pumped from 2300 feet to 6500 feet below ground and emerging as hot as 108 degrees rains down from wide showerheads.

High in iron and calcium, believed to lower blood pressure and relax muscles, it is also poured from glass pitchers and frozen into ice cubes.

"When there's an economic problem in the region, Argentines stop coming and that causes a major problem," said Monica Lozano, the hot springs specialist for the Uruguayan Ministry of Tourism. "We're looking for other places to promote these sites."

Horacio Quiroga has not exorcised all traces of its institutional past. The outdoor pool overlooks the Salto Grande Dam, source of 70 per cent of the country's energy.

Guests cannot hear the turbines, but the soundtrack of bubbling water and classical music is interrupted by the slapping of pool noodles against the water's surface and the "uno, dos, tres" of a martial exercise instructor.

There is less pampering than at Arapey Thermal; the plastic lawn furniture shakes as guests carve their tenderloin, and the napkins housed in metal dispensers can hardly absorb a teardrop.

But there are advantages to the casual atmosphere. Barefoot guests roam the corridors robed in the white uniforms that hang in pairs in room closets.

And there are no forms to fill out for borrowing a bicycle, so guests who sleep through the morning stroll tour the 540-acre property on a whim, pedalling past neat lines of planted pines and eucalyptus inhabited by a startling variety of brightly coloured birds.

Horses are available for meandering off the pavement toward the woods and the orange grove that encircle the water park and its wave pool and towering slides. Hypnotising digital displays announce the water temperature in three thermal baths.

Farther south, the regional government runs the Guaviyu hot springs, keeping prices low enough for backpackers looking to kick back by a dozen indoor and outdoor pools.

A day at the park costs about a dollar and visitors can rent a heated cabin for as little as US$25 a night. The village that has grown around the pool includes a butcher shop that ensures that the grills behind every cabin are always smoldering and that the evening air is perfumed by Uruguay's famous, grass-fed meat.

"In the area, there are other hot springs. But this is the safest country in the region," Lozano said. "We have a reputation for being very calm."

IF YOU GO

The Arapey Thermal Resort and Spa (Termas del Arapey, Salto; 598-76-82005; www.arapeythermal.com.uy) is an hour north of the city. A superior room on a weekend costs US$125 a person, including three meals and the merienda the traditional late-afternoon snack.

The Hotel Horacio Quiroga (Parque del Lago Salto Grande; 598-73-34411; www.hotelhoracioquiroga.com) is about 20 minutes outside downtown Salto.

The hotel provides a free shuttle from the bus station. Except during holidays, the weekend rate for a double junior suite, with breakfast, is US$172.

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