Nestled on the Derwent River on the south-east coast of Tasmania is the State's capital, Hobart. Occupying both banks of the Derwent River, this picturesque city has a relaxed atmosphere, which is why it is so popular with mainland Australians. The township is focused on its busy docks, where you can watch the local fishing catch coming in and the large icebreaker ships being loaded before they head south to Antarctica. Constitution Dock is an especially popular marina around New Year's Eve, when the yachts arrive from the annual Sydney to Hobart Race, which leaves Sydney Harbour on Boxing Day. This race, Australia's premier yacht race, has been contested since 1949, and is regarded as one of the toughest races in the world. The docks area and city centre feature many delightful cafe's and restaurants, along with boutique stores. There is a shopping precinct at Elizabeth Street Mall, plus many retail stores along Collins, Murray, Liverpool and Argyle Streets.

Hobart has resisted the pressure to modernise, the old buildings add to the city's charm. Tasmania's Parliament House was built by convicts in the late 1830s, originally as a customs house, and is now fully restored. The Penitentiary, Chapel and Criminal Courts, a National Trust Property and one of Tasmania's oldest convict buildings, sits on Brisbane Street -a tour of this site will reveal eerie underground tunnels which once led to execution yards. There are historic homes throughout the State; in Hobart there are fine examples of the Colonial, Georgian and Victorian periods, many of which are owned by the National Trust. Runnymede House, a colonial building, was built by a lawyer, Robert Picton, in 1840 in New Town, to the north. Theatre Royal, in Campbell Street, is Australia's oldest theatre, originally opened in 1837Ñit still boasts a full program of theatre and music. To appreciate the history of Hobart, take the heritage walk -tours depart the Wrest Point Casino at 2 p.m. on Saturdays.

Tasmania is renowned worldwide for its beer, and Cascade Brewery in South Hobart opens the brewery, museum and gardens to the public on weekdays. The brewery was founded by Peter Degraves in 1824, and is the oldest in Australia; it still uses traditional manufacturing methods. Even more popular is chocolate. The Cadbury Chocolate Factory, Australia's largest confectionery factory, is in Claremont; it too opens its nearly 15 ha (37 acres) plant for tours, which show the chocolate manufacturing process and, even better, offer samples. It is essential to book for this tour.

Near the Cadbury Factory is the Alpenrail (this is found on Abbotsfield Road), a piece of Switzerland in Tasmania. This indoor village and model railway display places you in the Alps of Switzerland; you listen to Swiss music while gazing upon rivers, lakes and the magnificent scenery that can only be found in Switzerland. Ten kilometres south of Hobart, at Taroona, is the Tudor Court Model Village, another intricate village model.

The Tasmanian Transport Museum at Glenorchy is a must for tram and train buffs. It boasts a wide collection of steam trains, rail cars, trams and trolley buses. There is even a railway station and signal box. The Hobart-based Classic Rail Tours Tasmania has restored two 1939 rail carriages - these are available for tours and charter bookings. The cars run from the museum in Glenorchy to the town of Ross every third Sunday during the warmer months.

Sandy Bay, a suburb only 2.5 km south of Hobart, is home to Wrest Point Casino, Australia's first casino, which was opened in 1973. At that time, Australians used to flock to it to legally play blackjack, roulette and keno although since then, casinos have now been built in other States. However, Wrest Point is still popular and the complex includes many fine restaurants as well as a large convention centre. Sandy Bay is also home to the John Elliot Classics Museum, situated in the grounds of the University of Tasmania, which contains artifacts from Ancient Mesopotamia, Egypt, Greece and Rome, and the Masterpiece Fine Art and Antique Gallery, which features Australian paintings from the Impressionist, Colonial and Modern periods, plus many Aboriginal paintings and antique furniture.

North of Hobart, on the shores of the Derwent River, is Plasminco Metals, a zinc mining plant -tours are conducted on weekdays (suitable clothing is required). Further north is Risdon Cove Historical Site, where the first European settlement was begun, during 1803. The site has a visitors' centre, theatre, monument and housing displays. If your preference is to spend some time outdoors, go to nearby Mount Wellington, which offers superb views of Hobart and the Derwent River. There are numerous walking trails, plus bicycle and even Harley Davidson excursions are possible here.