Lima.– With four-digit inflation and violent Maoist guerrillas, Peru for many years was hardly the place for a seaweed wrap in a swank hotel.

But nowadays, relative peace and a booming economy draw boutique travelers to the Andean terrain and ancient ruins that were previously the domain of brave, budget-conscious backpackers.

Celebrity tourists Bill Gates and Cameron Diaz both recently visited Machu Picchu, where $965 a night gets you a room with a view of the famous Inca citadel. In nearby Cuzco, elevation 11,500 feet, you can have extra oxygen pumped into your room for $30 a night.

Yet as free-market President Alan Garcia speeds the development of Peru's high-end tourism sector, he is sparking a standoff with local residents who say they won't benefit from the boom. Earlier this year, protesters shut Cuzco's airport and blocked the only rail line to Machu Picchu to make their point.

"Cuzco no se vende!" they shouted in demonstrations: "Cuzco is not for sale!"

It is a longtime paradox in Peru, where the economy expanded 9 percent in 2007 for the ninth year in a row. But poverty persists, especially in many of the highland tourist destinations, affecting some 44 percent of the 27 million population.

The government touts tourism as a job-generator. But most protesters don't work in the industry and are more focused on the need for good education and health care –things they say a few dozen more waiter and bellhop jobs won't fix.

"Most of the Cuzco area lives off of agriculture," said Gonzalo Valderrama, 30, a local anthropologist who joined the protests. "Just because there is more tourism investment, it does not necessarily benefit those who live in the surrounding state."

Tourist entries at Lima's Jorge Chavez International Airport increased from 998,000 in 2002 to more than 1.8 million last year, according to Peru's Foreign Trade and Tourism Ministry, thanks in part to an award-winning publicity campaign launched two years ago.

Some 160,000 of them spent at least $1,000 a day, said Tibisay Monsalve, general manager of the Hotel Association of Peru.

Visits to Machu Picchu, Peru's top tourist destination, have more than doubled in the last decade to 800,000 people –along with the price of getting there.

Cuzco now has a half-dozen four- and five-star hotels. That compares with two in the early 1990s, when the city was a haven for daring travelers defying U.S. State Department warnings against the bloody Shining Path insurgency.

Peru's picturesque highlands were the epicenter of a dirty war between the military and leftist guerrillas that killed almost 70,000 people between 1980 and 2000.