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Quito is a beautiful and relatively safe city. It is surrounded by mountains and has lots of green areas for kids to run around in. My kids didn’t suffer any ill effects of the altitude but we did take time to acclimate to the height. I would reccomend saving activities that are very strenuous or that will take you even higher into the Andes, (like the TeleferiQo), for later in your trip.

As for the Hotel Quito, it is a lovely hotel with a very large pool and lots of grounds for the kids to run around in. The rooms are clean, the amendities sufficient, (cable tv, minibar, safe), and the staff is very hospitible. Don’t miss the buffet breakfast!