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The Sanctuary Lodge is the famous hotel next to Machu Picchu ruins. The location is outstanding, and surely one of the most privileged in the world. This hotel is part of the Orient Express chain, who also operate the luxury Hiram Bingham train to Machu Picchu, along with the Miraflores Park hotel in Lima. Try booking all three together and requesting a discount.
The Sanctuary Lodge is luxurious but extremely expensive. Many clients are disappointed by the smallish size of the rooms, none of which have views of the Inca ruins themselves. Suites are far larger, and absolutely fantastic. It's quite so expensive due to the amazing location - get up early and you'll have the ruins of Machu Picchu all to yourself.
If you don't plan on an early rise, you are wasting your money. Non early risers and those that are put off by the cost should consider the Inkaterra (Pueblo) hotel in the nearby town of Aguas Calientes. It is, in fact, a better all round hotel - it's worth staying two nights as there are many nearby nature trails to explore.
There's plnety of other hotels in Machu Picchu in addition (actually, all the hotels are in nearby Aguascalientes) - all budgets are catered for in this very popular tourist region of Peru.