If you are looking for the finest in Cuzco hotels, look no further than the Hotel Monasterio, which is housed in the San Antonio Abad monastery.  Built in 1532, the property became a hotel in 1995, and it maintains plenty of its Old World charm.  The Hotel Monasterio features elegant and luxurious rooms, all of which exude modern styles while not compromising the colonial integrity of the complex.  Because the hotel was once a monastery, the rooms here vary in size and shape, but all are deluxe and unique.  If you are heading off to Machu Picchu, you will likely run into other travelers headed that way in the morning, as you enjoy a lovely breakfast.  Come dinner, you might choose to eat at the hotel restaurant, Illary, which is arguably the best restaurant in the city.  Simply walking the courtyards at the Hotel Monasterio is practically worth the price of admission, and should you be feeling the effects of the altitude on your mind and body, you can pay a bit extra to have oxygen pumped into your room.  This hotel is found on the list of Leading Small Hotels of the World, and there is little doubt as to why.  According to some, it is the best hotel in all of Peru.