What's New

Former President Alan García, who went into exile after a disastrous term (1985-90), was elected president for the second time in 2006. Another ex-president, Alberto Fujimori (who also had been living in exile, and disgrace, abroad), was extradited from Chile and promptly jailed in Peru. Fujimori is currently on trial for directing death squads to murder leftist guerrillas, making him the first president in Peruvian history to be tried for crimes committed during his administration.

Under García, Peru has enjoyed relative political and economic stability, in contrast to the tumultuous last years of the Toledo administration. The Peruvian economy has continued to expand, growing at a rate of 8.3% in 2007, and in December 2007, the U.S. and Peru signed a Free Trade Agreement that is likely to lead to even greater growth in coming years.

A massive earthquake (7.9 on the Richter scale) struck a large coastal area south of Lima in September 2007, devastating the cities of Pisco, Ica, and parts of the Paracas National Reserve. The earthquake killed more than 500 people and left nearly 100,000 homeless. Though much of what travelers go to see was not affected, including the Nasca Lines, the region will take years to rebuild, a factor travelers should keep in mind if they intend to travel to the area.

Getting Around

By Train -- The Ferrocarril Central Andino (tel. 01/361-2828; www.ferroviasperu.com.pe), the highest passenger train in the world but notorious for its patchy service record over the past several years, is back up and running again from Lima to Huancayo in the Central Highlands. The scenic passenger train runs once a month between July and November ($54-$87/£27-£44 round-trip), leaving from the Estación de Desamparados in Lima, but as always its problematic history makes it virtually impossible to plan a trip to Peru around the train trip.

By Bus -- Progress continues on a first for South America -- a paved highway linking the Pacific and Atlantic oceans will connect the southern coast of Peru with Brazil, cutting across the southeastern Amazon of Peru and the Brazilian state of Acre. The construction of the Inter-Oceanic Highway has entered its final phase, with ground broken just north of Puerto Maldonado, and hopes are that the 2,600km (1,600-mile), $900-million project will be finished by 2010. How this will affect road travel across southern Peru and into the jungle in coming years, though, is still anyone's guess.

Lima

Where to Stay -- Casa Andina inaugurated a new luxury flagship hotel -- in what was Lima's original five-star hotel -- in January 2008. The new Private Collection Miraflores (tel. 01/213-9700; www.casa-andina.com) is the chain's swankiest urban hotel yet. The new Second Home Peru (tel. 01/477-5021; www.secondhomeperu.com), an upscale B&B in Barranco, is also in an older building, but in this case it's very distinguished indeed: the home of the renowned Peruvian artist Victor Delfín.

Where to Dine -- Gastón Acurio, Peru's top celebrity chef, keeps on expanding his empire; the informal cafe-bar-restaurant he opened with his wife Astrid, T'anta (tel. 01/421-9708), now has four branches, including one in Lima Centro.

A favorite new restaurant in Barranco is the stylish Chala (tel. 01/252-8515; www.chala.com.pe), serving what it calls "costa fusión," adding Mediterranean influences to Limeño standards.

The Central Coast & Highlands

Ica -- Bodega Ocucaje (tel. 056/408-001; www.ocucaje.com), a resort and winery near Ica, suffered significant damages in the August 2007 earthquake. The resort is now closed and, at least for the time being, the winery is no longer accepting visitors.

Cusco

Where to Stay -- Casa Andina (tel. 084/232-610; www.casa-andina.com) opened one of its new upscale, "Private Collection" hotels in a historic building near Qoricancha -- making that five hotels in the city, with another luxury version on the way, for the upstart Peruvian chain. Casona les Pleiades (tel. 084/506-430; www.casona-pleiades.com) is a new, cute, and relaxed French-owned boutique inn tucked in the San Blas neighborhood. Niños Hotel (tel. 084/231-424; www.ninoshotel.com), famous for its good works and great-value rooms, now has a country inn under its auspices: Niños Hotel Hacienda, in the town of Huasao, 30 minutes from Cusco (rates include transportation, lunch, dinner, and a tour of the local ruins).

Where to Dine -- Don Esteban & Don Pancho (tel. 084/243-629) is a new and surprisingly chic and modern-looking restaurant serving Peruvian mountain and coastal favorites, as well as a whole host of pisco cocktails. The mini-chain also has a cafe and cafeteria in town -- all going by the same name.

Greens (tel. 084/243-579), a longtime Cusco favorite, moved from its relaxed, bohemian-looking location in San Blas to a second-floor spot just off the Plaza de Armas. The new iteration is more refined, hushed, and elegant.

Cusco After Dark -- The owners of the excellent and popular restaurant Cicciolina have opened a wine bar, which is unusual in these parts. Baco (tel. 084/242-808) also serves pizza and munchies to go with its wines, which are predominantly from South America and Spain.

The Sacred Valley of the Incas

Where to Stay -- In Pisac, a genial small country inn owned by a New Yorker, Hostal Paz y Luz (tel. 084/203-204; www.pazyluzperu.com) is attracting folks looking to tap into the Sacred Valley's spiritualism, with Andean healing workshops and sacred plant ceremonies. Hoteliers continue to bet big on the Valle Sagrado, and more plans for new country-luxury hotels are in the works. The Libertador Tambo del Inka (tel. 084/201-126; www.libertador.com.pe) is undergoing a massive renovation; in 2009, it should become one of the valley's largest and most luxurious hotels. Casa Andina Private Collection (tel. 084/976-550; www.casa-andina.com) completed its on-site spa (if not the planned pool), and it is first-rate all the way, with luxurious massage rooms, carved-stone Jacuzzis, and more.

Where to Dine -- Filling a niche in the Sacred Valley is the new chef-driven restaurant El Huacatay (tel. 084/201-790; www.elhuacatay.com), in the heart of Urubamba. It's probably the most appealing restaurant in the Sacred Valley, where guests are much more accustomed to eating in their hotels.

Hiking the Inca Trail -- The number of authorized agencies allowed to sell Inca Trail trekking packages has expanded exponentially, to at least 140, both in Cusco and beyond. The Camino del Inca, or Inca Trail to Machu Picchu, continues to climb in popularity and price; standard-class treks, the most common and economical service, start at about $350 (£175) per person, including entrance fees (and premium group treks can cost as much as $1,000/£500 per person). Several companies, including Mountain Lodges of Peru (tel. 084/236-069; www.mountainlodgesofperu.com), are now offering alternative and even luxury treks (in which hikers sleep not in campsites but comfortable lodges along the way) to Machu Picchu, avoiding the overcrowded Inca Trail.

Machu Picchu -- Prices continue to rise on PeruRail trains (and schedules continue to change), but none so much as the luxury Hiram Bingham train, which now costs an astounding $588 (£294) round-trip.

The climb to the peak Huayna Picchu, which offers astounding views of the ruins below, is now subject to new restrictive regulations. Only 400 people per day are permitted to make the climb; the path is open daily 7am to 1pm, and the first group of 200 must exit by 10am.

Machu Picchu was named one of the "New Seven Wonders of the World" in 2007. Sadly, though, Machu Picchu also made the notorious 2008 World Monuments Watch list of the 100 Most Endangered Sites in the World (the ruins were previously on the list but were removed in 2002). According to the World Monuments Fund, "little has been done to address the impacts of tourism on the site or the resulting environmental degradation of the area."

On a positive note, Yale University has agreed to return to Peru the lion's share of the artifacts collected by its archaeologist Hiram Bingham, who is credited with discovering Machu Picchu in 1911. A new museum is expected to be built in Cusco by 2010.

Puno & Lake Titicaca

Where to Stay -- Casa Andina (tel. 051/363-992; www.casa-andina.com) recently opened its new upscale Private Collection Puno, on the banks of Lake Titicaca. The hotel has its own train stop for folks coming in from Cusco.

Arequipa

What to See & Do -- Like Machu Picchu, the great Monasterio de Santa Catalina also appeared on the 2008 World Monuments Watch list of Most Endangered Monuments; the convent is in danger of structural damage caused by pollution and earthquakes.

Where to Stay -- Casa Andina, a chain on the move, added a new luxury hotel, Private Collection Arequipa (tel. 054/226-907; www.casa-andina.com), which occupies one of Arequipa's emblematic colonial buildings, the former Mint House, a national historic monument.

Colca Canyon

Where to Stay -- The former Parador del Colca, owned by the luxury hotel chain Orient-Express, has completed its upscale transformation. With the 20 new super-luxe bungalows (each with private terrace and plunge pool) comes a new name: Las Casitas del Colca (tel. 01/610-8300; www.lascasitasdelcolca.com). There's also a new spa and free-form swimming pool on the premises. The big changes mean that what was once a downright bargain is now targeting elites only: Prices, which include all meals and activities, run $1,000 (£500) per double.

Amazonia

Antica Pizzeria (tel. 065/241-988), part of a mini-restaurant chain out of Lima, opened one of its cozy and dependable pizza and Italian joints in Iquitos, on Jr. Napo 159 near the Plaza de Armas.

A completely new concept -- chic, luxury river cruises -- has come to the northern Peruvian Amazon. Aqua Expeditions (tel. 866/603-3687 in U.S. and Canada or 065/601-053; www.aquaexpeditions.com) cruises the Pacaya-Samiria National Reserve on an architect-designed ship, and the menu was created by one of Lima's star chefs. Cabins, with massive picture windows framing the Amazon, are more the stuff of stylish urban apartments than crusty riverboats.

Northern Peru

Chiclayo -- Where to Stay -- A terrific new place in the countryside outside of Chiclayo, near the Túcume pyramids, is Los Horcones de Túcume (tel. 01/224-3367; http://loshorconesdetucume.com), a well-designed rural lodge.

Cajamarca -- Visitor Information -- Telephone numbers have changed across Cajamarca; most exchanges, rather than beginning with "8" (822, and so on), now begin with "3" (365, and so on) Many websites have not caught up to the changes.

Where to Dine -- El Cajamarqués, a longtime dining favorite, has closed. Not nearly as elegant, but a whole lot more fun, is La Vaca Loca (tel. 076/828-230), a cool pizza joint just off the Plaza de Armas.

Huaraz -- By Plane -- Travelers can finally fly to Huaraz on daily afternoon flights from Lima on LC Busre (tel. 01/619-1300; www.lcbusre.com.pe). Flights range from $79 to $99 (£40-£50) one-way.