Hostal El Balcon (Tambo de Montero 222, tel. 084/23-6738, www.balconcusco.com , US$55 s, US$69 d) is a lovely restored colonial house with rustic charm and a pretty, flower-filled garden. This 16-room hostel is quaint and homely, and rooms are decorated simply with weavings on the beds.
Charming, German-owned Pensión Alemana Bed and Breakfast (Tandapata 260, tel. 084/22-6861, www.cuzco-stay.de , US$55 d) is the closest thing to a European pension in Cusco . There are 12 light and airy rooms, many with incredible views over the city, very comfortable beds, and great showers. A pleasant garden looks out over the red-tiled roofs of the city, and a nightly fire crackles in the dining room.
The unpretentious Hostal Corihuasi (Suecia 561, tel. 084/23-2233, www.corihuasi.com , US$44 s, US$55 d) is a quick, steep walk up from the Plaza de Armas  and has old-world charm that befits Cusco. The rooms of this rambling, eclectic colonial house are connected by verandas and walkways. Some of the rooms are nicer with views over the city; others are dark, with porthole windows.
In Santiago, one of Cusco’s oldest neighborhoods, is the charming Panza del Artista (Calle Jorge Ochoa 215 interior, tel. 084/26-2610, www.panzadelartista.com , US$40 s, US$60 d). The seven rooms, some with sweeping views of the center of Cusco from their balconies, are spacious and open with natural light. The terraced gardens are perched above the bustling city and provide respite with all-day sun, lush local plants, and a variety of birds. Owners Adam L. Weintraub (who has a good new photography book on the Cusco region called Vista Andina) and Xiomara Romero win over guests with their extended Cusqueñan family. Guests can sit for hours in the family kitchen, a welcome respite from the touristy center. The hotel is about a 10-minute walk from downtown, near the San Pedro market.
MamaSara Hotel (Saphy 875, tel. 084/24-5409, www.mamasarahotel.com , US$70 s, US$85 d) is very pleasant and comfortable. The rooms are heated, spacious, and immaculate and come with flat-screen TVs, good showers, and oxygen on request.
Encantada (Tandapata 354, tel. 084/24-2206, www.encantadaperu.com , US$70 s, US$90 d) is a pleasant new hotel in a modern building with great views. The minimalist decor and white comforters are a breath of fresh air. The hotel also doubles as a massage and spa center, and there are special packages: one night’s accommodation with two hours of Jacuzzi and massage costs US$150. The owners also have A Mi Manera, a nice restaurant on Triunfo, and a recommendable tour agency—Culturas Peru (www.culturasperu.com ).
An impressive, original Inca doorway, once the entrance to a sacred place, is now the way into the hotel Rumi Punku (Choquechaca 339, tel. 084/22-1102, www.rumipunku.com , US$70 s, US$90 d). Light-filled terraces, a garden with an original Inca wall, and a gym and spa make this a pleasant place to stay. The rooms have all the necessary amenities and the staff are friendly and helpful.