15 Best Hotels in Cusco, Cusco and the Sacred Valley

Set in a restored, 17th-century property—on a cobblestoned street just a few blocks north of the Plaza de Armas—this elegant boutique hotel has whitewashed walls, exposed wood beams, and colorful Peruvian embroidered pillows (also available for sale in the gift shop) juxtaposed with trendy lamps and contemporary Italian furniture. Rooms are spacious, and many have balconies that overlook the well-landscaped courtyard; some have modern soaking tubs. Other amenities include down duvets, iPod docks, flat-screen TVs, and oxygen to help with altitude sickness. At the spa, a large indoor hot tub and steam room are open to all guests—great after walking the hilly streets of Cusco.

Colonial with more than a touch of class, this exclusive, 11-suite boutique casa comes complete with a manicured interior courtyard; stately sitting and dining areas; and rooms with heated floors, antique-looking but modern bathtubs, and marbled showers. Every detail inspires appreciation, from the chic furnishings to the intricately carved wooden doors, soaring stone archways, and smiling staff. The hotel captures all the charm of a 16th-century mansion while offering all the amenities of a modern world-class retreat. After a day of tromping about town, you may find yourself cozying up and settling in, but be sure to pull yourself away from your private nook long enough to enjoy afternoon tea.

A former palace and convent dating from the 18th century, Palacio Nazarenas, located just off the Plaza de Armas, is one of Cusco's most glamorous hotels, featuring spacious, locally inspired suites surrounding seven cloistered terraces. Each room is enriched with oxygen (upon request, no fee) to assist with altitude acclimatization and features a satellite TV, complimentary Wi-Fi, and an iPad preloaded with a city guide and hotel information. Deluxe suites, known as the Z Collection, include original Inca and colonial features, special views, and/or beautiful balconies. Additional luxuries on the property include Cusco's first heated outdoor pool and a sensational restaurant and bar specializing in fine regional cuisine. The authentic Andean- and Incan-inspired spa uses therapeutic, organic local ingredients like pink Andean salt, purple corn, honey, coffee, and coca leaves.

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.

Everywhere you look, there are original pieces of art juxtaposed with modern furnishings at this luxurious boutique hotel housed in a 16th-century colonial mansion. Service is impeccable, and amenities include an intelligent oxygen system, central heating and air-conditioning, heated bathroom floors, and much more. Once you manage to get out of your bathrobe and slippers, you'll find it easy to explore, given that the hotel is right in the center of town.

Part of a national chain, all the Casa Andina hotels exude professionalism and are a great value, but each hotel differs in style—the San Blas branch, in a colonial house perched up on the hillside, offers great views over the city's terra-cotta rooftops. The modern and comfortable rooms are tastefully furnished with Andean touches.

This upscale option, where rates are a fraction of those at other Cusco lodgings, has two wings: the front half, which drips with colonial charm—with accommodations set around the attractive, arcaded courtyard of a 17th-century building (once the home of the Marquis of Picoaga)—and the new wing, which features modern rooms and minimalist design but is still big on comfort. The old rooftop bar has been converted into three rooms with the best views in the house.

Tucked behind a high wall, this casona from 1630 was built on Inca terraces and has been transformed into a charming boutique hotel managed by the same company behind Ollantaytambo's El Albergue. Stone walls and wooden fittings welcome guests into a quaint and lush garden that leads upstairs to the “balcón” proper—a wooden balustrade where the best rooms have balconies, all fitted with rustic-chic adobe tiles and timber beams, and offer a truly stunning view of the city nestled between the mountains. On clear days, you can sit on the balcony's benches and see Nevado Ausangate on the horizon.

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.

Close enough to but still removed from the hubbub of the Plaza de Armas, this posh property that's part of Marriott's Luxury Collection has made the most of its gorgeous colonial past—it was the last home of Francisco Pizarro, the first governor of Peru—while upgrading its room design. The place is huge without seeming so, and has both colonial and modern wings. The colonial rooms are lush as befits the era, many with original furniture; the rooms in the modern wing all have colonial touches, and every room features central heating to keep out the chill. Stop at the plush bar for a mean pisco sour, and browse through the lobby's original art, including Escuela Cusqueña paintings.

Restoration of the landmark 1592 Monastery of San Antonio Abad—where the chapel has an ornate gold altar and Cusqueña art, and the serene cloister will take your breath away—allowed one of Cusco's top hotels to retain an austere beauty, from the elegant lounge bar to the compact rooms that blend colonial furnishings with remote-control window blinds, TVs that pop up from cabinets, and other mod-cons. For those having trouble adjusting to the altitude, the hotel offers an in-room oxygen enrichment service.

A massive stone door—that's what rumi punku means in Quechua—opens onto a rambling complex of balconies, patios, gardens, courtyards, terraces, fireplace, and bits of Inca wall scattered here and there linking a series of pleasantly furnished rooms that have hardwood floors and comfy beds covered with plush blankets. The top-level sauna and gym have stupendous views of the city. The Rumi Punku Superior section offers slightly larger, more lavish rooms, but everyone can enjoy lounging in the cafeteria and courtyards.

Step through the enormous original 16th-century doorway and into the plush lobby for a feel of this property, a beautiful and comfortable blend of old and new, featuring large rooms with amenities such as oxygen pumped in on request (at an extra charge), in-room thermostats, down comforters, and king-size beds. The library has books from the 1800s to browse through, and archaeological exhibition rooms display some of the finds unearthed during the excavation and restoration of the hotel. The main restaurant has a wall from the colonial church that once made its home here, and you won't want to miss the bar's pisco sours.

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.