Located at the southern tip of Vancouver Island, the stately city of Victoria has a British flavor and a frontier spirit. The city surrounds a scenic harbor and prevailing winds keep temperatures in the 40s, even in late December. That means travelers here can spend their days strolling cobblestone streets, admiring buildings illuminated with holiday lights, and cross-country skiing along the timber roads that stretch into the forest north of town (pop into Sports Rent for skis). Come New Year's Eve, there's a ball worth attending at the Fairmont Empress in the middle of town, and there are parties in bars like the excellent Bard and Barker. There are not, however, the sort of crowds you'd likely encounter up at Whistler or in Vancouver.
Though the Empress is far and away the nicest hotel in town – and one of the plushest palaces in Canada – Victoria is well known for its friendly bed-and-breakfasts. We recommend booking one in the Fairfield neighborhood, a short walk from the harbor. The views of the Juan de Fuca Straight are beautiful, and there will be a place to park the car. You'll need to drive to the Sooke Potholes, a collection of swimming holes and cascades that are lonely and beautiful when the ice comes creeping in.