5 Best Hotels in Cusco and the Sacred Valley, Peru

A boutique hotel housed in a colonial mansion, Andenes is located just a few blocks from the Plaza de Armas but offers a quiet respite from the crowds there. A number of services are offered, including airport pickup, Wi-Fi, a full buffet breakfast, and oxygen (upon request), and rooms are also heated, an unusual and very welcome bonus. The rooftop terrace is the perfect place to relax and look out over the city below.

Occupying a three-story casa on the upper end of Choqechaka near Calle Siete Borreguitos, this hostel has a handful of affordable, smart en suite doubles with warm wooden floors and beautiful views of the valley and surrounding mountains. It's also very close to Calle Siete Borreguitos and a 20-minute walk to the Cristo Blanco.

For lodging with a social conscience, this is a great budget option: proceeds from your stay at the "Children's Hotel" provide medical and dental care, food, and recreation for disadvantaged cusqueño children who attend day care on premises and cheerfully greet you as you enter the courtyard. Rooms are on the spartan side, with painted hardwood floors, but the mattresses are firm and comfy, and there's plenty of hot water. The place is immensely popular, so much so that it's developed two nearby sister properties, Fierro and budget-savvy Niños House, the farthest of the three from downtown.

This cozy place with an unbeatable location right on the main square offers a home away from home—one in which common areas have murals crafted by the Peruvian-American owners, rooms are hung with Andean tapestries, and comfortable beds are made up with good clean linens. Breakfasts feature delicious homemade bread from the on-site Cuchara de Palo restaurant. The hotel also has a lovely spa nearby in Taray where you can have traditional therapies, such as herbal baths, massages, and other treatments.