Lima, with its Spanish colonial architecture, and Cusco, with its impressive stonework of pre-Inca and Inca civilizations, notably at Machupicchu, are the centers of Peru's ailing tourism industry. Lake Titicaca also constitutes a major tourist attraction. However, as a result of terrorism, insurgency, common crime, the 1990-91 cholera epidemic, and the April 1992 coup, tourism has declined drastically since 1988, when Peru received an estimated 320,000 foreign visitors and US$300 million in tourism earnings. One American tourist was murdered in Cusco in early 1990, and several others died in the late 1980s because of sabotage of a train line between Cusco and Machupicchu. Under sharply increased taxes on tourism imposed in 1989 in response to declining numbers of tourists, foreigners have had to pay far more than Peruvians for internal flights and visits to museums and archaeological sites. In 1989 six flights a day shuttled tourists between Cusco and Lima, but by late 1990 there were only two. Tourist arrivals in Peru continued to decline in 1990 and 1991.

According to the National Tourism Board (Cámara Nacional de Turismo--Canatur), tourism in the first half of 1992 was down 30 percent from the first semester of 1991, which, in turn, fell 70 percent from 1988, tourism's record year. A major blow to Lima's hotel business was the SL's car bomb attack in the exclusive Miraflores district on July 16, 1992, in which six major hotels suffered over US$1 million in damages. The number of tourists visiting Cusco and Machupicchu had dropped 76 percent since 1988.

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Source: U.S. Library of Congress