Merida is a wonderful vibrant city with lots to see and do. Nightly outdoor performances of music and dance are everywhere in the centro on weekends and also on Thursday nights. Check the weekly updated events calendar here for where to go.
There are several great restaurants in the Centro Historico, but one that really stands out was Casa de Frida. The Duck with Mole Sauce is great and the Chiles en Nogada's sauce is delicate yet rich with flavor. Tables are inside, but the roof opens to the sky. Very romantic. Prices are very reasonable for the quality.
Other recommended places are Pan e Vino (Italian food on Calle 62 near 61), Bella Epoca (Calle 60 between 59 and 57) which has great panuchos and great seats out on the balcony, Peregrino's on Calle 57 between 60 and 62 and Cafe Lucia on Calle 62 at Santa Lucia Park. All these restaurants have good, dependable and delicious food. You can sit outside at all but Pan e Vino.
For an elegant but not terribly expensive dinner, try Hotel and Restaurant Villa Maria at the corner of Calle 59 and 68. Dinner is served either in the airy courtyard or in the airconditioned front rooms. Villa Maria's food is fresh, delicious Continental cuisine (steak, salmon, chicken, etc.) with a great dessert called Pear Dali. It has a full bar and the best service in town. The most elegant place to eat within walking distance of the zocalo.
Interestingly enough, there are also restaurants that serve authentic Yucatecan fare, which, if you are used to tacos and burritos served at your local Tex-Mex restaurant, will be refreshingly different and exotic. A very good, Yucatecan meal can be had at La Tradicion where chef David Cetina offers practically all the Yucatecan classics. Remember that the main meal in the Yucatan is eaten in the middle of the day; La Tradicion is not open at night (and you wouldn't want to eat a heavy Yucatecan meal right before bed-time!).
If however, you are a late-nite eater, you may want to venture off the beaten path and visit a local favorite La Susana Internacional, where you can find what are probably the largest panuchos and salbutes you have ever seen. Their caldo especial, a turkey broth filled to the brim with shredded turkey meat and served with a crunchy tostada (fried corn tortilla) that you break up into your caldo like you would a soda cracker in your clam chowder; and a piece of lemon or sour orange that again, you squeeze to perk up the caldo with a blast of fresh citrus.
For breakfasts, try El Gran Cafe at the end of Paseo de Montejo at Calle 47. They have American and Yucatecan food, good coffee and fresh juices. On weekends they have a breakfast buffet.
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