Belmond Palacio Nazarenas (*****)
Set in a tranquil plaza behind Cusco's main square, this former palace and convent emerged from years of restoration to become one of the city's most exclusive hotels. Step past walls of Inca stones and into a cloistered courtyard with an ancient fountain at its heart. Then be surprised as contemporary Cusco comes to the fore: a fabulous spa, the city's first outdoor pool and stylish restaurants serving cutting-edge local cuisine. This intimate urban retreat has just 55 suites, each enriched with oxygen and with its own private bar where guests can create drinks accented with fresh ingredients grown at and around the hotel.