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It lies in the middle of the 22-kilometre wide Bahía de Banderas , the seventh largest bay in the world, fringed by endless sandy beaches and backed by the jungly slopes of the Sierra Madre. Its hotels are scattered along several miles of coast with the greatest concentration in Nuevo Vallarta , north of the town and sliced through by an eight-lane strip of asphalt. Just south of Nuevo Vallarta is the new marina , where you can stroll along the boardwalk and have a look at how the other half live, on beautiful boats. Despite the frantic development of the last decade, the historic town centre, with its cobbled streets and white-walled, terracotta-roofed houses, sustains the tropical village atmosphere.

The town's relative youth is undoubtedly a contributing factor. Until 1954 Puerto Vallarta was a small fishing village where the Río Cuale spills out into the Bahía de Banderas; then Mexicana airlines, their hand forced by Aeroméxico's monopoly on flights into Acapulco, started promoting the town as a resort. Their efforts received a shot in the arm in 1964, when John Huston chose Mismaloya, 10km south, as the setting for his film of Tennessee Williams' play The Night of the Iguana , starring Richard Burton. The scandalmongering that surrounded Burton's romance with Elizabeth Taylor - who was not part of the cast but came along - is often attributed to putting Puerto Vallarta firmly in the international spotlight: "a mixed blessing" according to Huston, who stayed on here until his death in 1987, and whose bronze image stands on the Isla Río Cuale in town.

The package tourists stay, on the whole, in the beachfront hotels around the bay, but are increasingly penetrating the town centre to shop in the pricey boutiques and malls that line the streets leading back from the beach, and to eat in some of the very good restaurants both on the malecón and downtown. Nevertheless, what could be a depressingly expensive place to visit turns out to be liberally peppered with good-value hotels and budget restaurants, especially during the low season (Aug-Nov).

Puerto Vallarta today is one of the gay centres of Mexico, with a great deal more tolerance for - and entertainment geared towards - the gay scene than almost any other Mexican town.