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Inkaterra plans 3rd upscale resort as rich visitors flock to Peru
Travel Agent / October 2004

By Larry Luxner

Inkaterra, which operates upscale ecolodges at Machu Picchu and in the Peruvian Amazon, plans to open a third property next year, this one in the ancient city of Cuzco.

José Koechlin, Inkaterra's founder and president, said his company is expanding thanks to an upsurge of interest by U.S. travelers in South America, and particularly Peru.

"There's a tremendous improvement in the American perception of Peru, especially with regard to safety, biodiversity and cultural heritage," Koechlin told Travel Agent. "Americans are discovering South America, and it's affluent Americans who are coming more and more. There's also a big effort to promote Peru by our government and the World Bank."

Last year, more than 350,000 foreigners visited the Inca ruins of Machu Picchu, making it Peru's single most important tourist attraction. That's good news for Koechlin, whose company has operated the 84-room Machu Picchu Pueblo Hotel since 1991. The property — while not as expensive as the $500-a-night Orient Express located right at the ruins — is still considered very high-end, with rates starting at $374 for a two-person room, including breakfast, dinner and "eco-activities" (rates increase to $429 for a two-person junior suite and $519 for a two-person deluxe suite).

The area has long been popular with European and Israeli backpackers on very tight budgets. Known as "mochilleros," they generally stay in $15-a-night youth hostels.

"Backpackers still come, but American backpackers are not stingy," said Koechlin. "They're used to comfort, and they value the environment."

Koechlin said his dream when he undertook the Machu Picchu project in 1975 was to create a haven for visitors that would allow them the luxury of a leisurely visit to Machu Picchu. That's because while thousands of tourists take the train from Cuzco daily to visit the lost city, 95% of them spend only a few hours at the site, then board the train back to Cuzco.

Inkaterra bills its 15-acre Machu Picchu property, located adjacent to the train station at Aguascalientes, as "a tranquil fusion of opulent comfort, excellent cuisine, Incan style and construction, a mélange of tropical gardens, plantations, natural beauty and conservation."

"The entire construction of the hotel was accomplished at a time when it was virtually impossible to import luxury items to Peru," he said. "So Denise, my wife, and I had to design, build, create, fashion, manufacture and weave everything from stratch."

He explained: "We needed faucets that would look authentic, so we had them produced at an iron-foundry in Lima. We wanted Inca blankets for the beds, so we commissioned the wool from sheep farmers, had it dyed to our specifications, and woven by a team of local seamstresses. We designed the furniture — replicating the Andean low-log chairs that symbolize humility."

Until recently, Inkaterra catered mainly to the European market — primarily France, Italy, Spain and Germany — but now, says Koechlin, "we are shifting to the American market, because English-speaking visitors constitute 67% of our guests."

Koechlin said around 80% of Inkaterra's revenues come from the Machu Picchu resort, where occupancy is running at over 80%. He said it's now possible to catch a night flight from New York to Lima, connect to Cuzco in the morning, drive by car to Ollantatambo and travel for just over an hour by train to reach Machu Picchu.

The other 20% of revenues is generated by Inkaterra's other property, the 33-room Reserva Amazonica. This ecolodge is located in the Tambopata rainforest, on the shores of the Madre de Dios River in the heart of Peru's Amazon region. Tambopata is about an hour's motorboat ride downriver from the nearest town, Puerto Maldonado — which is itself connected by daily flights with Lima and Cuzco. Rates there start at $120 per person including all meals and ground transportation.

Koechlin said occupancy at the Reserva Amazonica is around 60%. At present, Inkaterra is finishing a 90-foot-high rainforest canopy walk consisting of eight bridges. The $400,000 project is being built by Americans and financed by the World Bank and the UN's Global Environmental Facility.

"We've been working on this as a conservation project more than a hotel project," said Koechlin, a board member of Washington-based Conservation International. "We've been raising money through tourism in order to do conservation and offer guest satisfaction in authentic places."

Not satisfied with its projects in Machu Picchu and the Amazon, Inkaterra is now working on a third property. It is renovating a 16th-century mansion in the heart of Cuzco, the ancient Inca capital located nearly 4,000 meters above sea level, about a four-hour train ride from Machu Picchu.

The property was originally the residence of Francisco Pizarro, legendary conquistador of the Incan Empire. Once renovations are completed, the house will become a 14-room, high-end boutique hotel "underscoring the house's historic heritage, Inca craftsmanship and post-modern design."

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