Built as a shipping port during the late-19th-century coffee boom, this old port features a uniquely dilapidated wooden pier. The beaches here are not all that enticing, though there are some better ones nearby. The old pier is worth a look and you can still walk on it for an out-of-this-century experience.
Lining the beach in the area adjacent to the pier are a variety of cheap eateries serving mostly seafood.
Sportfishing outfitters and tourism authorities are trying to restore some of this town’s old glory and infrastructure as a place from which to run deep-sea fishing trips. A new marina was built partially with Dutch capital.
A fun day trip from Retalhuleu  is a 55-kilometer mountain-bike ride along old railroad tracks and wooden bridges. Reuxtreme (tel. 5202-8180 or 5205-1132, www.reuxtreme.com , info [at] reuxtreme [dot] com) runs the trips, costing $30 per person and including all gear. It also does surfing lessons here.
For accommodations and food, your best bet is Hotel Posada del Mar (tel. 7773-7101, along the highway into town at Km. 222, $25 d), where the comfortable rooms have air-conditioning and cable TV. There is a restaurant serving mostly seafood dishes along with a swimming pool.
Alternatively, there’s the Hotel Montelimar (2a Calle and Avenida Coatepeque, tel. 7773-7231, $13 d), where the wooden bar outshines the small, dark rooms.