Portugal: Beautiful, soulful, affordable

— -- LISBON, Portugal -- On a cobbled back street in the ancient Alfama neighborhood, candlelight dances across the crumbling, 19th-century blue-and-white tiled walls of the Mesa de Frades tavern. Amid a hush of anticipation, fado singer Pedro Moutinho steps in front of two acoustic guitarists, closes his eyes and pours out a tune of loss so haunting, it can make strong men weep. Those packed into the hole-in-the-wall erupt with approval.

What jazz is to New Orleans and blues to Memphis, this melancholy folk music — born in the bars and bordellos of Lisbon over a century ago — is to this capital of three million on the banks of the Tagus River. And with the country's economic woes, experiencing it now is more affordable than ever.

"Fado is a storytelling medium that came from the troubadours," says filmmaker Diogo Varela, who leads private fado tours and is the great-nephew of Portugal's greatest fado singer, the late Amália Rodrigues. "It's not so much about your voice as how you express emotion and your life experience."

Fado, which means "fate," also is the musical expression of the Portuguese concept of saudade, a soulful yearning for the unattainable, as bittersweet as Port wine. This quintessential national trait is as unfathomable to outsiders as the city's labyrinth of secret passageways and back alleys crisscrossing its seven hills.

"Lisbon has a decadence and melancholy that comes from lost grandeur," says Danish director Bille August, who's here shooting Night Train to Lisbon, starring Jeremy Irons. "It's a mysterious place, but there's an innocence to the city."

Irons agrees. "There is a magic and this will be our biggest challenge: to reproduce this mystery in our film," he told the Portuguese newspaper Sol.

Indeed, that magic and mystery — along with the country's reputation as a European bargain — may have propelled Portugal to a tourism record in 2011. A study by Hotels.com ranks the hotels among the most affordable in a major European destination. In the past year, average prices have dropped from just over $117 to about $104 per night, with some five-star Lisbon lodgings charging less than $200. Doubles in the hip LX Boutique Hotel, for example, go for $154, including breakfast.

Three-course meals in informal restaurants — featuring the country's famed seafood, especially cod, the national obsession — start at about $25.

Leave your heart in 'Sao Francisco'

With its weathered cable cars, iconic bridges (such as the Vasco da Gama, Europe's longest) and steep winding roads tumbling to the waterfront, Lisbon is an Old World San Francisco look-alike. But rather than showy Victorian townhouses, it's a faded tableau of red-tiled roofs and wrought-iron balconies, Baroque churches and whitewashed plazas, baked by centuries of sunlight. Sherbet-colored buildings — in lemon, lime, peach, apricot — are slathered with enough mosaic tiles to fill the ships of this once-great trading empire.

"I hope you realize what you have here in the extraordinary buildings," Irons said at a Lisbon press conference for Night Train. "You have an absolute jewel."

The Alfama, a Moorish enclave that survived the city-flattening 1755 earthquake, is the city's star. But she's an enigmatic charmer, luring the unwary into a maze of narrow alleys, unexpected alcoves and hidden haunts that crawl the hill to the city's crowning glory, the Castle of São Jorge, dating from the sixth century.