Port Fairy is a fishing town, which like Portland started as a sealing and whaling town. You can find out about the history of the town at the Port Fairy History Centre. There are also a couple of interesting walks which you can take around the town, including the History Walk and the Shipwreck Walk and other interesting things to do.
Adjoined to the mainland at the south of Port Fairy is Griffiths Island, which homes a colony of Mutton birds. You can get to the island on a couple of cruises from Fishermans Wharf on Port Fairy Bay. Port Fairy is also known for its great music festival, the Port Fairy Folk Festival. It is held in March every year, and is always very popular.
Port Fairy offers plenty of accommodation in the area, including b&b's and numerous guesthouses. There are also a few camping grounds and a backpackers. There are also some pleasant daytime and evening cafes and restaurants.