Aguas Calientes (now officially Machu Pichu Pueblo) is a small town at the bottom of the valley next to Machu Picchu, and the principal access point to the site. Despite its magnificent setting, it's not the most scenic town, owing to fast and ruthless development to support the huge influx of tourists. Unless you're on a daytrip from Cusco or plan to spend a fortune and stay at the sole lodge in Macchu Picchu itself, you´ll need to spend at least one night here.
The only ways to get to Aguas Calientes are by train or by foot.
Until July 2010, the train will not run all the way between Aguas Calientes and Cusco, due to severe flooding from the 2010 rainy season. Instead, train services stop at Piscacucho, which is 82km from Cusco. Travelers must take either a bus or a taxi from Cusco to Piscacucho; preplanning is strongly advised, as a taxi will cost 100-200 soles and take around two hours from Cusco. Buses are much cheaper but also much much slower.
Peru Rail has a monopoly on the tracks, and is at the moment the only option. Trains depart from Poroy, just outside of Cuzco, twice daily. The scenic journey through the Sacred Valley takes about 4 hours. Tickets should be bought in advance either online or at the Wanchaq train station on Av Garcilaso in Cuzco. Try to book several days in advance if possible, especially in the high season. It´s not possible to select your own seats online, so if you have a preference, buy them at the station. The fares start at US$48 each way in the 'Backpackers' cars, with decently comfortable seats and snacks for sale. The 'Vistadome' cars are the mid-range cars at US$71 each way, with more comfy chairs and meals served. If you prefer to ride in style, opt for the 'Hiram Bingham' at US$294 each way, complete with gourmet meals and an observation carriage.
The cheapest option (short of walking) is to bus it to Ollantaytambo and catch the train from there. A minivan bus from Cusco to Ollanta costs S/10. Ollantaytambo is worth staying a night in, it's a pretty little town with beautiful ruins of it's own.
If you're on a budget, or just adventurous, it's possible to hike up along the railway tracks from Ollantaytambo or from the town known as km 82, where the Inca trail starts, this is about a seven hour hike (Note - hiking on the train tracks is prohibited).
It's also possible to hike in along the train tracks from Santa Teresa (4 hours). To reach Santa Teresa, take a local bus to Santa Maria from Cusco. It leaves Cusco at 8am (from the Santiago bus depot - S/20) and passes through Ollantaytambo and Urubumba. It´s an 7 hour journey from Cusco to Santa Maria. You can also take a Minivan (Colectivo) which leaves next to the buses (S/25-30 - 4 hours). At Santa Maria, take a connecting bus to Santa Teresa (S/6, 1.5 hours) or a taxi (S/10, 1 hour). You can spend the night at Santa Teresa or trek onto Aguas Calientes. Walk 2 hours or catch a bus (S/5) to the hydro electric plant (planta hidroeléctrica), from there follow the signs that say exit (salida in spanish) to the train line up the stairs. It's an additional two hours of walking to Aguas Calientes from here, but it's possible to catch a train for $8.00 US to Aguas Calientes, possibly much cheaper if you are Peruvian (leaves hidroeléctrica at 4 PM). As the tracks are still in use, be careful, especially when crossing bridges and in the tunnels (better go off the tracks before the tunnels, right handed there starts a street about 1km before Aguas Calientes).
There are also hiking paths coming from Mollepata for the extremely adventurous. You will want to get your hands on some topographical maps beforehand, Hiking and Treking around Cusco is available for around S/25-30 and has details on the routes you can take.
The town is compact and walkable, and there are no vehicles apart from the buses to Machu Picchu and a few work vehicles.
Machu Picchu is what most people come to see.
Soak your weary Inca Trail-beaten muscles in one of the hot springs for which the town was originally named (after taking a thorough shower, of course). The baths can be found be walking up the main street. These are not bad, but the feel is much like a public pool and they can be crowded, since everyone wants to get into the hottest pools. The cost is 10 soles, you can rent towels or swimming trunks before you go in if need be.
Dozens of massage parlors abound in town (all legit, although of varying quality). Prices from S/40 for a one-hour massage.
There is also some hiking to be done. If you follow the train tracks towards Machu Picchu (downhill from town) you will shortly come across a trail on your right heading uphill. (If you come to a train tunnel, you've gone too far.) This trail leads up the mountain called Putucusi, and is the mountain adjacent to Machu Picchu. It is a steep trail with quite a few near-vertical wooden ladders. The elevation gain is 1,000m from Aguas Calientas, and reaching the summit takes about an hour. Wear long pants and bring some water. The summit offers amazing views of Machu Picchu if it's a clear day. As of July 2010 portions of the vertical wooden ladders have been obscured by a mudslide and you are only able to reach the top of Putucusi by firmly hauling yourself up a steel cable (not recommended, unless you are an experienced rock climber).
Further along the tracks near the bridge to Machu Picchu you will reach an ecological centre with rainforest walks that will consume about one hour of your time. You can reach this by following the road towards Machu Picchu as to avoid walking through the railway tunnel. There is a stair case leading up to the train tracks near the bridge to Machu Picchu.
If you continue further along the tracks towards Santa Teresa at 113km you will reach the gardens and waterfall of Mandor, which is private property and requires foreigners to pay S/.10.00 for entry. This is a nice walk with many orchids and some rainforest and leads to a small waterfall, in this area there are three small ruins but there are no paths leading to them.
Heading in the opposite direction following the train tracks from Aguas Calientes towards Ollantaytambo you will see some other ruins and a waterfall.
Hiking on the train tracks is prohibited, although it seems to be the only way to reach certain destinations.
Near the bridge at the bottom of the path leading to Machu Picchu is a path leading to the Machu Picchu museum and botanical gardens, also worth checking out if you have the time.
In town there are many restaurants and internet cafes. Internet cafes charge about S/.3.00 - S/.4.00 per hour and there are also CD and DVD burning facilities to store your photos. DVDs cost S/.15.00 each to burn. Meals start from S/.10.00.
Costs for visiting Aguas Calientes from Cuzco: Current train ticket prices are at Peru Rail's website. The bus from the town Aguas Calientes up to Machu Picchu costs $14.00 per person for a return trip, or $7 one-way. You can walk to the ruins for free, but it's steep uphill and takes about an hour and a half. You have to buy your ticket for entering the ruins at the Cultural Centre in Aguas Calientes (if you're not doing the whole tour from Cusco with a guide). This ticket costs S/126 per person and is valid for 1 entry over a period of 3 days (so if you've only got one night in Aguas Calientes, are on a budget and arrive with the backpacker train at roughly 11:30am decide if you want to go up to Machu Picchu in the afternoon or early morning). Remember to take water and snacks with you as the snacks available at the ruins are insanely expensive.
Prices on most things are high, if you´re on a tight budget, bring some snacks and water from Cuzco, where they´ll be around half the price. If you´re wanting to use a credit card for hotel or purchases, note that most places only accept Visa.
There is a big market along the road to Machu Picchu, and a big handicraft market in front of the railway station.
Some shops sell hand-painted t-shirts, which are far more expensive than other t-shirts in Peru but are a little more creative.
The town is full of pizza restaurants, which are a safe option. Menu Hoy or Todays Menu is usually S/.10.00 - S/.15.00 and depending on where you go will be something along the lines of -
Palta Rellena (Stuffed Avocado) Soup Main Course (generally trout, beef or chicken) Tea, Coffee, Fruit Juice, Wine or Pisco Sour
Alpaca is definitely worth trying if you get the chance, in my opinion it tastes better than beef or lamb.
The smaller restaurants up the hill will often offer twice the food at half the price than the larger establishments, and the quality is usually the same.
Indio Feliz (Happy Indian) is a nice French restaurant for those willing to spend a bit more than at the other places. Meals will cost about 30 soles here plus drinks but the food is outstanding. There is a also a 50-soles prix fixe menu that provides three courses is good value. The restaurant is owned by a Frenchman and his Peruvian wife, who are both very friendly.
Every restaurant has an advertising guy whom will give you a business card and their name - it can get quite annoying as there are many restaurants whom will try to lure you into their establishment. The ad man will take you to the bar/restaurant and seat you and for this they'll get a 10% tax added to your final bill and then if the service was good you'll want to tip the normal 10% of the bill. You'll end up tipping 20%. One could see it as creating jobs... yet annoying.
Many bars try to lure in costumers with 4 for 1 happy hours lasting the whole evening. Beware that the price is fourfold of the normal prices in Cuzco.
Signs warn that it is not allowed to sell and/or consume alcoholic beverages after 11pm. However, it's not too hard to find a place to drink some beers after this time.
There are many sleeping options in Aguas Calientes. There is one very expensive hotel right next to the Machu Picchu entrance.
Internet cafes are spread around the town, and cost around S/3 per hour with slow connections. They offer local and long-distance calls as well.