Just across the Strait of Gibraltar from Morocco, Spain's southernmost city, Tarifa, feels as Moorish as it does Spanish (with a little Gothic austerity thrown in for good measure). And the place to see all that history is the fantastic Posada La Sacristía. A stable in the 1600s turned café in the 18th century, the three-story building is now in the hands of designers Bosco Herrero and Miguel Arregui (the latter worked for Oberoi resorts in India). The duo has transformed it into a stylish restaurant with ten rooms, keeping much of the original interior but mixing it with contemporary design. Giant clay urns stand guard at the doorways; Vietnamese silk lanterns hang from the archways. Canopy beds, antique lamps, and Victorian mirrors fill the space. Some of the rooms possess a monastic simplicity—a grand luxe hotel this is not—so ask for the all-white No. 8, which has yards of billowing curtains and a big palm-shaded terrace. In the kitchen, La Sacristía's Catalan chef, Pere Campillo, prepares excellent dishes from the Euro-Asian menu, such as tuna carpaccio with soy-and-honey vinaigrette and tandoori chicken kebabs with curry rice. From $135 to $160. At 8 Calle San Donato; 34-956/681-759; www.lasacristia.net.