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Peru - DIY or package tour?
Any thoughts on the best way to travel to Peru? We're thinking about two weeks, and we want to hit Lima, Machu Picchu and Lake Titicaca. The package tours seem to be less expensive than putting it together on our own, but I'd kind of like to choose my own hotels. From what I can tell, the packages seem to use "budget" hotels, and some of those are not getting good reviews on tripadvisor.
We'd also like to do a two day hike of the Inca Trail, but so far I haven't seen any packages that include that.
Thoughts? Recommendations? We've already pushed our trip back a month because we just can't seem to get it together!

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Re: Peru - DIY or package tour?
We did Peru on our own and I found it fairly simple to put together. We stayed at the Sheraton in Lima because we wanted to use Starwood points for it. We flew between Lima and Cusco on Lan. In Cusco we stayed at the Libertador Palacio Del Inka. The hotel was awesome and it a fantastic location. Once we got to Cusco, we booked a day bus tour to the Sacred Valley/Pisac. We took the train to Machu Picchu, we had booked this in advance. In retrospect, we should have stayed overnight in MP, I wished we had more time there.
I hate tours, so we use them as little as possible. We are not hikers, so I cannot help you there. We accidentally hiked from Aguas Calientes to MP because looking at the map, we didn't think it would be a far walk. There is a bus available and it turns out the route wasn't far, but it was straight up. That really killed a lot of time for us as well.
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We did not use a tour (other than for the Inca Trail). But we stayed hostels for the vast majority of the trip and I try to avoid tour vacations, generally. We had no problems getting around at all (landed in Lima, flew immediately to Cusco, took a bus from Cusco to Puno, then buses to Bolivia, and flew back to Lima).
As far as doing the 2 day hike, if you're physically up for it, I highly recommend doing the 4 day hike. You just see so much more. But if you're set on the 2 day and doing a tour, I would just ask the tour operators for packages that include it. My guess is that they have other people who want to do the 2 day trail, too.
Having just been there, I'd say it really depends on what kind of vacation you want. We did it on our own for WAY cheaper than any package tour we've ever seen. That said, we stayed in Hostels or Hospedajes for very cheap, and ate at local places instead of tourist places. We liked being able to do what we wanted, when we wanted instead of being restricted by tour timelines. Again though, it really is dependent on what your expectations for hotels, etc are as well as how comfortable you are with planning for things on your own.
Also, there are loads of tour operators that offer a two day hike that you can book right in Cuzco, but I agree with the above comment that if you can swing the time, go for the 4 day trek. I really wish we'd been able to do that...
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We planned it on our own with no problems at all. We did the two day hike, but I can't remember the company we used now. It was a few years ago and I can no longer remember. We stayed in small hotels for the most part. We hit Lake Titicaca on the Bolivian side and loved it. I haven't been to the Peruvian side so I can't compare, but Isla del Sol on the Bolivian side was amazing!
Here was our itinerary, if it helps:
Lima--2 nights
Huacachina--2 nights
Nazca--1 night
Arequipa--3 nights
Cusco/MP--5 nights (four in Cusco, one in Aguas Calientes)
Copacabana--1 night
Isla del Sol--2 nights
We took the bus between all the locations except for a flight between Arequipa & Cusco. If you take the bus at all, I recommend paying extra for the ones that cater to tourists. Worth the extra $$ as the drivers seemed to drive much more safely.
We did a private tour with Kuoda Tours (kuodatravel.com) -- just us, a tour guide and a driver. I'm sure it was more expensive than if we had planned it ourselves, but we weren't 100% confident in our ability to navigate everything on our own, especially because we wanted to go to Lake Titicaca. It was an awesome experience, and we were particularly happy we'd made the decision when my husband got sick in Puno because we really needed the assistance. Our hotels were definitely not budget.
We have a number of detailed posts on our blog here: http://justanothertravelblog.blogspot.com/search/label/Peru
We're going in May and are planning it ourselves. Haven't had any issues yet, and from the tour prices I've seen, we're doing it cheaper. We are staying in budget and medium range hotels and even splurged on hiring a private guide/driver for a few days in the Sacred Valley.
It is more work to plan it on your own, but I love the flexibility it allows.
I've been using Fodors forums, TripAdvisor and the Lonely Planet guide books.
An American Girl's Travels