First-time visitors to this hamlet on the Nam Song River can be forgiven for feeling a little lost. With shirtless young backpackers drinking beer and suntanning, it looks more like an Ibizan beach town than a Laotian village. But no, you didn't take a wrong turn at the Thai border. This is Vang Vieng a farm town turned full-moon party, smack in the middle of a communist state. Once a resting place for opium-addled sojourners on sweet, slow tours of the East, Vang Vieng is now a haven of a different sort. It has become a popular stopover for gap-year students on Southeast Asia's well-trodden holiday trail and erstwhile young bankers spending some of that severance pay. Drug dens have given way to beach huts serving up candy-colored cocktails and blasting American pop. For about $10 a day the young and hedonistic can float down the river, booze in hand, then stop by the pub for pizza or pancakes. The town, a recent returnee says, "is like the land of the lotus eaters, and you are Odysseus in an inner tube."
Thankfully, Vang Vieng has much to offer grown-ups too, and it makes a charming stop if you're traveling overland between Vientiane and Luang Prabang. To beat the backpacker crush, opt for midmarket guesthouses like Villa Nam Song, telephone (856-23) 511 637, or the Elephant Crossing Hotel, (856-23) 511 232, which offer relative luxury (air-conditioning, television, private bathrooms). For fresh local food, try Vang Vieng Organic Farm, (856-20) 590 9132. Founded in 1996 by Thanongsi Solangkoun ("Call me Mr. T," he invariably says), it serves innovative Lao cuisine and also features a guesthouse and charity school. And if you can pull yourself from your porch, rent a bicycle or go caving deep below the valley's jagged karst mountains Green Discovery, (856-21) 264 528, sells tours. They're a lot more strenuous than knocking back a half-dozen vodka-jelly shots but ultimately more rewarding.
Download the new TIME BlackBerry app at app.time.com.