The town by Machu Picchu
Aguas Calientes is the very definition of a tourist town. It’s almost entirely hotels, restaurants and souvenir shops. It would not exist without the visitors who flock to Machu Picchu and all but shuts down during the rainy season of January and February.
It’s squeezed in the narrow canyon next to the Urubamba River (also called the Vilcanota) and is divided by two smaller rivers that flow into the Urubamba. Río Aguas Calientes flows through the center of town and Río Alcamayo joins the Urubamba next to the Inkaterra, where the train tracks arrive.
Most of the best hotels in Aguas Calientes are along the river, with views of the water and the sheer canyon wall on the other side, where jungle plants cling to the cliff. There are dozens of restaurants of all kinds throughout town. Expect prices to be higher than Cusco because everything has to be brought in by train.