Panama City is a vivid, modern and exciting city. With its rich history, distinct culture, exciting nightlife scene, stunning white sand beach and mouthwatering food, Panama City is a must-visit in Central America.
There are a few neighbourhoods stretched along a luscious beach in this city snuggled in a central location in Panama Bay. Panama City is a massive and sprawling metropolis and choosing whether you want hotels or rooms looking to the beach, is incredibly important. That’s exactly why I put together this epic guide to the best places to stay in Panama City.
This guide was written with one thing in mind, your best ever Panama City Beach holiday. I’ve got the best hotels, some sexy rooms, some shared rooms and a sneaky luxury suite (all with air conditioning, phew!). There are outdoor pools abound and the occasional rooftop pool too!
I want to help YOU find the best neighbourhood in Panama City based on what YOU want to do.
So whether you’re looking to party, eat, relax on the beach or sightsee… This guide is packed with all the information you need to make a confident and informed decision.
Let’s jump right to it!
Photo: @joemiddlehurst
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- Where is the Best Place to Stay in Panama City?
- Panama City Neighborhood Guide – Best Places to Stay in Panama City
- Panama City’s Five Best Neighborhoods to Stay in
- FAQs About Finding a Place to Stay in Panama City
- What To Pack For Panama City
- Don’t Forget Travel Insurance for Panama City
- Final Thoughts on Where to Stay in Panama City
- Buy Us a Coffee!
Looking for a specific place to stay while you’re backpacking through Panama? These are my highest recommendations for places to stay in Panama City.
If you’re travelling on a budget, check out the great hostels that Panama has to offer. Sometimes the best way to experience a destination is from a good dorm room with good people.
American Trade Hotel | Best Hotel in Panama City
American Trade Hotel is my pick for the best hotel in Panama City because it has a fantastic location in hip and historic Casco Viejo. This luxurious hotel features an outdoor swimming pool, a sun deck and free wifi. Luxury suites come complete with modern amenities and features.
Zebulo Hostel | Best Hostel in Panama City
This is my favourite hostel in Panama City. It is located in trendy Obarrio and is close to a myriad of attractions, landmarks, bars and restaurants. This hostel offers private rooms and dorms with air conditioning and comfy beds. There’s also wifi and a Jacuzzi. Breakfast is included with each reservation.
Book yourself a sweet hostel in Panama City and get ready for the time of your life!
Apartment in Panama City | Best Airbnb in Panama City
Located in Panama City in the historic area of Casco Viejo, you’ll be in the heart of the picturesque UNESCO World Heritage Site. This luxury studio apartment suite consists of a king-sized bed, an air mattress and a couch and can accommodate up to four guests. You get a TV, a washer and dryer, a bathroom, and a full kitchen.
My favourite thing about this Airbnb is its proximity to the beach and it’s close to bars and restaurants, stunning churches and museums.
If you’re still not inspired, consider checking out my guide on the best eco-resorts in Panama for a truly unique stay!
But there’s plenty to choose from…
Below you’ll find a map for easy navigation so you can start sussing out the place. Read on through if you want to see our recommendations.
Casco Viejo
Casco Viejo is the best area in Panama City to stay in if you’re visiting for the first time. The city’s historic district, Casco Viejo is one of the most beautiful areas of the city thanks to its colonial architecture and colourful street art.
Obarrio
Set in the centre of the city is the Obarrio neighbourhood. It seamlessly blends the modern with the historic and offers visitors an array of architectural styles to admire.
San Francisco
San Francisco is a lively and vibrant neighbourhood located east of the city centre. It is a chic and modern area that offers an incredible array of entertainment options.
Casco Viejo
Not only is Casco Viejo the best neighbourhood for sightseeing and first-time visitors, but it also holds the title as one of the coolest places to stay in Panama City.
El Cangrejo
El Cangrejo is a residential, middle-class neighbourhood located at the heart of the city. It is one of the few areas of the city where you can easily and safely walk around thanks to its many parks and low-key atmosphere.
Panama City is the largest city and capital of Panama. It is one of the most modern cities in Central America and is best known for its stunning architecture and the world-famous Panama Canal.
But, there’s more to the city than feats of engineering. Panama City boasts a rich history and diverse culture and offers visitors great shopping, lively nightlife, epic festivals, stunning views and a year-round fabulous climate.
The city covers an area of 275 square kilometres and is divided into many exciting distinct neighbourhoods. In this Panama City neighbourhood guide, let’s explore the five best places to stay based on what you want to do.
Photo: @joemiddlehurst
Casco Viejo is the best neighbourhood in Panama City to stay in if you’re visiting for the first time. It is packed with historic landmarks and tourist attractions. It is also one of the coolest places to stay in Panama City because it boasts an excellent selection of bars, restaurants, shops and clubs.
Travel north from here around Panama Bay and you’ll arrive in El Cangrejo. This downtown neighbourhood is my best recommendation for where to stay in Panama City with kids. It has ample green space, lots of amenities, and an abundance of family-friendly restaurants.
Next to El Cangrejo is Obarrio – this district is my top pick for where to stay in Panama City for one night. Or, if you’re on a budget because it has great hostels and good-value hotels.
And finally, west of the city centre is San Francisco. This is one of the best places in Panama City to stay for nightlife because it has great bars, lively clubs and delicious restaurants.
Panama City’s Five Best Neighborhoods to Stay in
If you’re still not sure which is the best neighbourhood in Panama City to stay in, don’t worry! Because in this next section, I’m going to take you through each neighbourhood in much more detail.
1. Casco Viejo – Where to Stay in Panama City for Your First Time
Casco Viejo is the best area in Panama City if you’re visiting for the first time, you get beautiful historic buildings and stunning beaches. The city’s historic district, Casco Viejo is one of the most beautiful areas of the city thanks to its colonial architecture and colourful street art. It was the first city in Panama built under Spanish rule and today is a UNESCO World Heritage Site.
There’s plenty to see, do and eat in Casco Viejo. This incredible neighbourhood is home to some of the best cafes, shops, and bars. Not only this, there’s an abundance of art galleries, museums, and lively local markets.
Panama is mostly safe for visitors but do pay attention to your surroundings, especially in touristy areas.
Las Clementinas | Best Hotel in Casco Viejo
Las Clementinas is a charming two-star hotel in Casco Viejo, one of Panama City’s best neighbourhoods. It sits close to popular tourist attractions and offers easy access to shops, restaurants and museums. Rooms come complete with a variety of amenities, including refrigerators, private bathrooms and iPod docking stations.
Hotel Casa Panama | Best Luxury Hotel in Casco Viejo
A great location and stunning views – it’s no wonder this is one of the best places to stay in Panama City! This four-star hotel is conveniently located in Casco Viejo. It has 39 air-conditioned rooms and boasts an outdoor pool, a beauty centre and a delicious on-site restaurant.
Magnolia Inn | Best Hostel in Casco Viejo
This charming property is centrally located in Casco Viejo, the best neighbourhood to stay in in Panama City for sightseeing. It is close to eateries, boutiques and bars, as well as museums, galleries and landmarks. This stylish hotel has comfortable and spacious rooms with air conditioning, free wifi and luxurious features.
Apartment in Panama City | Best Airbnb in Casco Viejo
Located in Panama City in the historic area of Casco Viejo, you’ll be in the heart of the picturesque UNESCO World Heritage Site. This luxury studio apartment suite consists of a king-sized bed, an air mattress and a couch and can accommodate up to four guests. You get a TV, a washer and dryer, a bathroom, and a full kitchen.
My favourite thing about this Airbnb is its proximity to the beach and it’s close to bars and restaurants, stunning churches and museums.
Things to See and Do in Casco Viejo
Photo: @joemiddlehurst
- Visit to the historic Panama Canal, the scenic Amador Causeway, and the culturally rich Casco Antiguo, this tour offers a unique and comprehensive experience.
- Enjoy the long stretch of white sand beach.
- Delve deep into the history of the Panama Canal at the Museo del Canal Interoceanico de Panama.
- Enjoy an incredible performance at the Teatro Amador.
- Marvel at the architecture and design of the marvellous Metropolitan Cathedral.
- Party the night away on Panama City beach
- See creative and innovative works of art at the Museum of Contemporary Art (MAC Panama).
- Discover the San Blas Islands on this day trip from Panama City. Visit Isla Perro, Arena Blanco, and Isla Diablo to swim in the warm ocean, relax on tranquil beaches, and have a freshly cooked lunch.
- Visit the interesting and informative Museo Panama Viejo.
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View on Osprey View on REI2. Obarrio – Best Place to Stay in Panama City on a Budget
Set in the centre of the city is the Obarrio neighbourhood, one of the safest and most popular areas of the city for visitors. It seamlessly blends the modern with the historic and offers visitors an array of architectural styles to admire. It is also hot property thanks to its great location and proximity to shopping, sightseeing, dining and nightlife.
Obarrio is my number one recommendation for where to stay in Panama City for one night or if you’re travelling on a budget. Tucked throughout this downtown neighbourhood is a great selection of backpacker hostels and boutique hotels that offer great accommodations at a reasonable price.
Holiday Inn Express Panama | Best Hotel in Obarrio
The Holidays Inn Express is one of the best places in Panama City to stay if you’re on a budget. Rooms are spacious and comfortable and each comes complete with modern amenities and a private bathroom. Guests of the hotel have access to a fitness centre, an outdoor pool and an airport shuttle.
If you squint from the rooftop pool, you can see the beach 😉
Zebulo Hostel | Best Hostel in Obarrio
This is my favourite hostel in Panama City. It is located in trendy Obarrio and is close to a myriad of attractions, landmarks, bars and restaurants. This hostel offers private rooms and dorms with air conditioning and comfy beds.
There’s also wifi, a Jacuzzi, and lots of games to enjoy. A tasty breakfast is also included with each reservation.
Beautiful and Quiet Apartment | Best Airbnb in Obarrio
This cosy apartment is ideal for those visiting Panama City on a budget. Located in one of the safest neighbourhoods in Panama, in downtown Panama City, it’s one of the most vibrant tourist areas. Walking distance from everywhere, you can find restaurants, bars, nightclubs and shops.
You also have access to the rooftop pool which oversees the city. Are you kidding me?!
Things to See and Do in Obarrio
Photo: @danielle_wyatt
- Be amazed by the incredible architecture and design of the Parroquia Santuario Nacional del Corazón de María.
3. San Francisco – Best Area to Stay in Panama City For Nightlife
San Francisco is a lively and vibrant neighbourhood located east of the city centre. It is a chic and modern area that offers an incredible array of entertainment options.
From buzzing bars and thriving clubs to cosy cafes and bustling pubs, this area of the city has something for err’ybody! Because of this, San Francisco is my pick for where to stay in Panama City for nightlife.
Love to eat? Then this neighbourhood is for you! San Francisco is one of the best areas in Panama City to stay in to sample local dishes and international cuisines. From food trucks to five-star restaurants, this neighbourhood is bursting with flavour!
Ramada Plaza by Wyndham | Best Hotel in San Francisco
This hotel has a great location in San Francisco, one of Panama City’s best neighbourhoods. This four-star hotel is close to restaurants and shops, as well as the city’s best bars. This contemporary and spacious hotel has a sauna, a steam bath and an outdoor swimming pool where guests can rest and relax.
Eden’s Garden Hostal | Best Hostel in San Francisco
Eden’s Garden Hostal is in a central location at the heart of Panama City. This property is close to popular bars and restaurants, as well as shops and tourist attractions. Eden’s Garden Hostal provides a variety of room options each with air conditioning, linens, towels and soap.
This Panama City hostel is also just a 20-minute drive (without traffic) from the airport so is a good option to dip your toes in.
Luxury Apartment in Panama City | Best Airbnb in San Francisco
With bomb views of the beach and Panama City, this beautiful loft is very affordable and a very good pick for where to stay. Within walking distance of restaurants, supermarkets, cafes and public transport, it’s an excellent base to explore the city. Modern, simple, well-appointed and comfortable, you will surely have a very good time in this beautiful loft.
Not to mention the hammock on the balcony and the gym (hell yeah you can stay fit on vacay!), the outdoor rooftop pool is bangin’!
Things to See and Do in San Francisco
Photo: Chris Lininger
- Go for a stroll through Omar Torrijos Park.
- Shop for new to your gems and treasures at Promises.
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Grab an eSIM!4. Casco Viejo – Coolest Place to Stay in Panama City
Casco Viejo is the best neighbourhood for sightseeing and first-time visitors and it holds the title of one of the coolest places in Panama City. It offers an incredible array of historical landmarks and tourist attractions as well as trendy restaurants, vibrant street art, buzzing markets and innovative art galleries.
The best way to absorb the atmosphere and spirit of Casco Viejo is to lose yourself in its cobblestone lanes. When night falls, pull up a chair at one of Casco Viejo’s sidewalk bars or cafes. From here you can enjoy a lively and buzzing night of food, drinks, dancing and people-watching.
Tantalo Hotel – Kitchen – Roofbar | Best Hotel in Casco Viejo
This hotel is conveniently located in Panama City. It offers easy access to the city’s most famous tourist attractions as well as bars, restaurants and shops.
Rooms are well-equipped with air conditioning and excellent features. This art deco property is also home to a delicious restaurant and a lively rooftop bar.
American Trade Hotel | Best Luxury Hotel in Casco Viejo
American Trade Hotel is my pick for the best hotel in Panama City because it has a fantastic location in hip and historic Casco Viejo. This luxury hotel features an outdoor swimming pool, a rooftop sun deck and free wifi. The Luxury suites come complete with modern amenities and features.
Magnolia Inn | Best Hostel in Casco Viejo
Magnolia Inn in San Felipe is a fantastic option for budget Panama City accommodation. It is located in the city’s hottest neighbourhood and there are plenty of restaurants, shops and bars nearby. This hostel offers comfortable beds and modern amenities as well as a laid-back backpacker vibe.
Boutique Hotel Casa Marichu | Best Apartment in Casco Viejo
Located in the historic area of Casco Viejo, the most popular area in Panama City, this spacious luxury suite is epic! One of the coolest places to stay in Panama City is this boutique hotel with a sexy outdoor pool area on the rooftop. The place consists of 10 luxury suites with a double bed, a bathroom, a fully equipped kitchen, and a living room with a flat-screen TV. You also have free access to the swimming pool next door.
This place will definitely make you feel home away from your home and is a great place to recharge when you’ve maxed out the beach.
Things to See and Do in Casco Viejo
Image: Nic Hilditch-Short
- Be amazed by the crazy colours and unusual exterior of the Biomuseo.
- Connect with indigenous people with this guided tour from Panama City to an Embera Village in the Chagres Jungle. Travel by canoe to a waterfall, savour a traditional lunch and go for a swim.
- Get your adrenaline pumping with a thrilling zipline adventure through the Panamanian rainforest.
- Shop, snack and sample your way through the boisterous Pixvae Market.
- Sip and sample local brews at Casa Bruja Brewing Co.
5. El Cangrejo – Best Neighborhood in Panama City for Families to Stay In
El Cangrejo is a residential, middle-class neighbourhood located at the heart of the city. It is one of the few areas of the city where you can easily and safely walk around thanks to its many parks and low-key atmosphere.
This neighbourhood is packed with great services as well as restaurants, shops and bars. Because of this, El Cangrejo is my best recommendation for where to stay in Panama City for families.
Great shopping, diverse dining, lush parks and plenty of pubs are just a few of the things this sophisticated neighbourhood has to offer. Here you’ll also find unique and eye-catching art, plenty of events and some of the most stunning views of the city.
Hotel Coral Suites Panama City | Best Hotel in El Cangrejo
Modern and spacious – this is one of the best places to stay in Panama City for families. It is conveniently located at the heart of the city and offers easy access to restaurants, shops, sightseeing and dining. Each room is equipped with air conditioning and a kitchenette.
Toscana Inn Hotel | Best Hotel in El Cangrejo
This is one of my top choices for where to stay in Panama City with kids because it has a great location. This charming hotel has spacious rooms with cable/satellite channels, a refrigerator and modern amenities. There’s also a delicious on-site restaurant that serves meals throughout the day.
Blu Hostel | Best Hostel in El Cangrejo
Blu Hostel is an excellent choice for Panama City accommodation, it is in a central location in El Cangrejo and offers easy access throughout the city. This hostel has both dorms and private rooms with comfortable beds and air conditioning. There’s also a kitchen, living room, and a relaxing balcony.
Isthmus Concept Apartment | Best Apartment in El Cangrejo
With an outdoor swimming pool, a fitness centre and a private balcony, this gorgeous apartment is perfect for families visiting Panama City. The apartment consists of a fully equipped kitchen, two balconies facing the beach and all the essentials you need to have a comfortable stay. Near restaurants and entertainment, it’s an excellent base to walk everywhere and explore the city.
Enjoy the rooftop outdoor pool and then get out and about in this area that is renowned for its gastronomic options.
Things to See and Do in El Cangrejo
Photo: @danielle_wyatt
- Marvel at the stunning Iglesia del Carmen.
- Pack a picnic and enjoy the sun in Parque Andres Bello, which has playgrounds, basketball courts and plenty of space to run around.
- Snap a pic with the giant sculpted head of Albert Einstein that can be found on Via Argentina.
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Hide Yo’ Money!FAQs About Finding a Place to Stay in Panama City
Here’s what people usually ask about the areas of Panama City and where to stay.
What To Pack For Panama City
Pants, socks, underwear, soap?! Take it from me, packing for a hostel stay is not always quite as straightforward as it seems. Working out what to bring and what to leave at home is an art I have perfected over many years.
Ear Plugs
Snoring dorm-mates can ruin your nights rest and seriously damage the hostel experience. This is why I always travel with a pack of decent ear plugs.
Hanging Laundry Bag
Trust us, this is an absolute game changer. Super compact, a hanging mesh laundry bag stops your dirty clothes from stinking, you don’t know how much you need one of these… so just get it, thank us later.
Sea To Summit Micro Towel
Hostel towels are scummy and take forever to dry. Microfibre towels dry quickly, are compact, lightweight, and can be used as a blanket or yoga mat if need be.
Monopoly Deal
Forget about Poker! Monopoly Deal is the single best travel card game that we have ever played. Works with 2-5 players and guarantees happy days.
Grayl Geopress Water Bottle
Always travel with a water bottle! They save you money and reduce your plastic footprint on our planet. The Grayl Geopress acts as a purifier AND temperature regulator. Boom!
Check out my definitive Hotel Packing list for even more top packing tips!
Can I go to the beach in Panama City?
Absolutely! Panama City Beach is a massive beach holiday destination and you can get yo’ tan on that beach all day err’y day if that’s your vibe. There are mad theme parks, discos and big vibes to be had all along the playa.
If you need a break from the beach though, there are sights to seeee! One of which is Mercado De Abastos, a huge, bustling local market in Panama City. Drive, or take a metro bus, taxi or Uber.
Can I get an outdoor pool?
Hell yeeeeah you can and I’ve got a bunch of accommodation options with not only outdoor pools but rooftop pools too! Panama City Beach has mad options for whatever you’re looking for. If you’re looking for cool pool vibes, most of the rooms I’ve recommended have air conditioning too.
Where is the most central location to stay?
Staying in downtown Panama City is the one. My recommendation for this area is Casa Viejo, also known as San Felipe or Casco Antiguo. This area is the historic centre of Panama City and is bordered by the luscious white sand of Panama City Beach.
Don’t Forget Travel Insurance for Panama City
A Panama City beach holiday will be bliss of course, but… anything could happen. Get good travel insurance and save yourself the headache.
ALWAYS sort out your backpacker insurance before your trip. There’s plenty to choose from in that department, but a good place to start is Safety Wing.
They offer month-to-month payments, no lock-in contracts, and require absolutely no itineraries: that’s the exact kind of insurance long-term travellers and digital nomads need.
SafetyWing is cheap, easy, and admin-free: just sign up lickety-split so you can get back to it!
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Final Thoughts on Where to Stay in Panama City
Panama City is a massive city that seamlessly combines its history with modern culture. It has a great selection of beautiful colonial buildings, colourful street art, lively nightlife and mouthwatering food. So regardless of your age, interests, style or budget, I guarantee Panama City has something for you!
In this guide, I’ve taken you through the best places to stay in Panama City, but there’s been a lot. If you’re still not sure where you’d like to stay, I get it!
Casco Viejo is my favourite neighbourhood because it has a rich history, bustling nightlife and an array of amazing restaurants. It’s also where you’ll find Zebulo Hostel, my favourite Panama City hostel.
Another great option is the American Trade Hotel because it has a central location and a stunning rooftop swimming pool. Each room is packed with modern amenities, in the vibey historic Casco Viejo.
Wherever you stay, I’m so sure you’ll love your time here, Panama City is a wonderful place to be. Your holiday here can be however you like it, hotels, rooftop pools, luxury suites, Panama City beach, the choice is yours!
Let me know in the comments if I’ve missed anything or if you’ve been or are going to Panama City. I’d love to chat!
Photo: @joemiddlehurst
- Check out our ultimate guide backpacking around Panama.
- Figured out where you wanna stay? Now it’s time to pick the perfect hostel in Panama City.
- Swing by our super epic backpacking packing list to prep for your trip.
- Our in-depth Central America backpacking guide will help you plan the rest of your adventure.
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