For a tourist town, restaurants in Cuzco are priced fairly decently. The most expensive restaurants and not always the most authentic ones are located near the main square. These restaurants will usually have aggressive sales people standing outside holding menus and yelling at you to come into their restaurant. They will often entice you with a “free drink card” usually for a complimentary Picso Sour. Be aware of some of these restaurants, sometimes they do not give you the drinks. Two of the restaurants on the square that I visited initially offered free drinks and then refused to give them to me after I entered.
Many small restaurants are located away from the square, some very local – and you will not find any tourists in them. These are the cheapest types of restaurants. The further you walk from the main square the trend seems to be towards cheaper restaurants. Often you can get a dinner for 2-5 US dollars. One restaurant merely a few blocks from the Plaza del Armas caters primarily to locals – no tourists were eating there every time I walked by. They served two dishes, either soup or a rice and vegetable dish. Portions were large and each dinner was only 2 soles! There are quite a few restaurants like this in Cuzco, you just have to do some exploring.
Street vendors sell a variety of snacks and meals – most common is meat on a stick bbq’d in front of you. Usually a variety of dipping sauces are available. These are quite tasty – buying food from street vendors is a very cheap meal. Make sure you watch them cook the meat and verify that it is well cooked.
Breakfast at a cheap local restaurant will run about a dollar or two. This usually consists of an egg or two cooked to preference, toast, butter and jam (extra jam may cost additional) and a fresh squeezed drink, usually orange or papaya juice.
Trout ceviche (raw fished marinated in lemon juice) is a popular dish in Cuzco. Cuy, (roasted guinea pig) is another local favorite. The several cuy I consumed were mostly bone and not much meat – however its worth trying this dish at least once if nothing other than to say you’ve eaten roasted guinea pig.