While the competition has heated up in recent years—like that from Belmond’s newer, more luxurious sister hotel Palacio Nazarenas next door (see below)—the Monasterio remains one of the most magical places to stay in Cusco, if not all of South America. Set within the San Antonio Abad monastery built in 1592 on the foundations of Inca Amaru Qhala's palace, this national historic landmark was transformed into a hotel in 1965. Inside the stone walls, which surround a beautiful cloistered courtyard with a fountain and a 300-year-old cedar tree, lies an immaculate collection of Peruvian history: an 18th-century Escuela Cusqueña art collection, a baroque-style gilded chapel, and entrance stones bearing the Spanish coat of arms and the image of Bishop Monsignor Juan Serricolea y Olea. The Monasterio is as much a museum as it is a hotel. Rooms, which can be enriched with oxygen (an extra $40 per night in deluxe rooms; already included in suites) to combat soroche (altitude sickness), feature rich wood furnishings and historic artwork. Some suites have private terraces, while others are two levels. Its signature Peruvian-Mediterranean restaurant, Illary, has courtyard seating when the weather is nice. The more relaxed El Tupay restaurant features a couple of local opera singers three nights a week.