When I first arrived in Panama City, I found it to be a breath of fresh air, compared to the gritty and dangerous capitals of most other Central American countries. It was much more developed, and the only negative came from my own poor planning, when I went to see the Panama Canal on a Monday (the one day it was closed for viewings – although it’s now open daily).
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, this place 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 here.
This guide was written so you can make the most of your trip. 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!
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 on where to stay.
Let’s jump right to it!
The Broke Backpacker is supported by you. Clicking through our links may earn us a small affiliate commission, and that's what allows us to keep producing free content 🙂 Learn more.
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
Where to Stay in Panama City’s Five Best Neighborhoods
If you’re still not sure which is the best area 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 for beginners to stay, 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. I felt safe during the day here, but didn’t attempt to explore after dark.
Top Things to Do in Casco Viejo
- 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.
Best Hotel in Casco Viejo: Casa Guogo by AmazINN Places
Casa Guogo has a pool, terrace and garden which I enjoyed relaxing in during my stay in Panama’s capital. It’s one of the cheapest private places to stay in, by Casco Viejo standards at least, so it’s a decent option for broke backpackers looking for peace, quiet and a nice change from stinky dorm rooms.
There was a large TV, comfy bed, and functioning AC in my room. This felt like a 3* hotel experience, so it was fantastic value for money. There are cheaper places to stay in other parts of the city, but Casco Viejo felt very safe to me.
Best Hostel in Casco Viejo: Viajero Casca Viejo Hostel
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. There’s a lovely rooftop with a pool, and I found Gabriel (the host) to be incredibly welcoming and helpful when I arrived.
I even found air conditioning in the rooms, which was a nice touch, because it was pretty humid when I came here, and that’s often the case in Central America.
Best Airbnb in Casco Viejo: Apartment 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. As a solo traveller, I didn’t find this to be very broke backpacker friendly, but with space for up to 4 people, it’s an absolute bargain if you share.
2. Obarrio – Best Place to Stay 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 those 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. We’re gonna focus mainly on the cheap options though, so you can stretch your money as far as possible.
Top Things to Do in Obarrio
- Be amazed by the incredible architecture and design of the Parroquia Santuario Nacional del Corazón de María.
Best Hotel in Obarrio: Hotel Tower House Suites
It may not be the swankiest hotel in the world, but we care most about budget, and this place is both cheap, and reasonably decent!
It’s just 5 minutes from the financial district, so you’re gonna be surrounded by the creme de la creme when you walk around outside. My room had a safe, fridge, TV and air conditioning,
Breakfast was included, but to be honest, it was nothing special. I’d recommend staying here for the price, location and amenities, but treat brekkie as a bonus.
Best Hostel in Obarrio: Zebulo Hostel
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.
Best Apartment in Obarrio: Habitaciones Privadas
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.
They have a 24/7 front desk, which I found useful when coming back from a late night in town. They also had all amenities I needed including a washing machine, which saved me from the hassle of hunting for a laundry place.
3. San Francisco – Best Area to Stay 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 nightlife lovers.
Love to eat? Then this neighbourhood is for you! San Francisco is one of the best areas to sample both local dishes and international cuisines. From food trucks to five-star restaurants, this neighbourhood is bursting with flavour!
Top Things to Do in San Francisco
- Go for a stroll through Omar Torrijos Park.
- Shop for new to your gems and treasures at Promises.
Best Hotel in San Francisco: Ramada Plaza by Wyndham
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.
It’s not cheap admittedly, but San Francisco lives up to its American namesake in that respect, which means you need to stay in a hostel to keep costs down in this part of the city. Luckily for you, we know a great hostel here…
Best Hostel in San Francisco: Eden’s Garden Hostal
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.
Best Airbnb in San Francisco: Luxury Apartment in Panama City
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’! It’s luxury, but get some mates together and you can save cash, enjoy all these amenities, and stay in a good spot. Now that’s what we love.
4. El Cangrejo – Best Neighborhood 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, I’d call this the best part of the 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.
Top Things to Do in El Cangrejo
- 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.
Best Hotel in El Cangrejo: Hotel Coral Suites Panama City
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.
Best Hostel in El Cangrejo: Blu Hostel
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.
Best Airbnb in El Cangrejo: Room in Bella Vista
For a cheap option, they don’t come much better than this. Sure, it’s a shared apartment (the room is private), but there’s a reason why this room has become a clear guest favourite on Airbnb.
Karen is a great host, who ensured the room was spotless when we arrived. She gave us some great tips for exploring Panama City, and even said we could use the pool and gym. With security at the entrance to the apartment block, we always felt safe here. Would definitely come back.
FAQs About Finding a Place to Stay in Panama City
Here’s what people usually ask us when looking for a good spot to stay here.
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!
Click the button below to learn more about SafetyWing’s setup or read our insider review for the full tasty scoop.
Which Part of Panama City Should You Choose to Stay in?
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, 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 hostel here.
Another great option is the Viajero Casca Viejo Hostel because it has a central location and a stunning rooftop swimming pool. It’s a budget-friendly banger 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’s capital. I’d love to chat!
- 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.
