We stayed at the Tambo del Inka Starwood property just outside Urubamba, a gem of a town in Peru's Sacred Valley. We walked to El Huacatay for dinner after reading about it in Frommer's and were very impressed. The grounds are beautifully landscaped and the lounge areas are private and welcoming. Our meal was excellent - the duck pastrami salad was the best salad I've eaten. The restaurant seemed to be filled mostly with tourists, but was authentic and unique regardless.
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