7 Best Hotels in Cusco and the Sacred Valley, Peru

Set in a restored, 17th-century property—on a cobblestone 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.

Sprawled across acres of greenery alongside the river, this retreat offers the utmost in tranquility and luxurious comfort, with riverfront views and light-filled rooms featuring cheery alpaca blankets and embroidered throw pillows, as well as natural materials that complement the surrounding landscape. The only thing better than the views and the rooms is the first-rate service. Also on-site are a heated swimming pool and a gorgeous spa that will pamper you using local products. Villas are perfect for families.

This small hotel offers a quiet getaway in a gorgeous rural setting—indeed, it's the perfect place to experience nature without having to rough it, as the rooms are tastefully appointed and ultracomfortable. Between the decor, the atmosphere, and the service, you'll feel as if you're in your own country home.Free breakfast is included, and a three-course Peruvian-fusion dinner can be added for an extra S/85. There is plenty of communal space, as well as private nooks in which to relax alone.