A favourite of our inspectors and our readers, Arce, near St-Etienne-de-Baigorry was recently redecorated and refurbished to maintain its impeccable standards. The setting - by a river in a typical Basque village - is a magical one, best appreciated from the dining terrace, which juts out over the water and is sheltered by a canopy of chestnut trees. Nestled there, one feels both intimate and secluded and nothing could be more pleasant than a relaxed breakfast by the water's edge. Inside, the public rooms are spacious: a smart dining room with picture windows, and a beamed library with books in a variety of languages. The green, white and red colours of the Basque flag predominate. Some of the bedrooms are impressively large, with apartment-sized sitting areas; others open on to small terraces with mountain views. A sizeable blue-tiled swimming pool is hidden in a green enclosure on the far side of a wooden bridge across the river.
  Management of the hotel is now in the capable hands of the fifth generation of the family Arcé. The much-appreciated cooking emphasizes fresh local ingredients, with an interesting wine list at reasonable prices. There is plenty to do in the area - walking, fishing, cycling, riding, canoeing - and the Atlantic coast is only half an hour away.