Panama City is a vivid, modern and exciting city. With its rich history, distinct culture, exciting nightlife scene, and mouthwatering food, Panama City is a must-visit in Central America.
But Panama City is a massive and sprawling metropolis and choosing where to stay is incredibly important. That’s exactly why we put together this epic guide to the best places to stay in Panama City.
This guide was written with one thing in mind – to help YOU find the best neighborhood to stay in Panama City based on what YOU want to do.
So whether you’re looking to party, eat, relax 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 – here are the best areas to stay in Panama City, Panama.
Photo: @joemiddlehurst
- Where to Stay in Panama City
- Panama City Neighborhood Guide – Places to Stay in Panama City
- Panama City’s 5 Best Neighborhoods to Stay in
- FAQ 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
Looking for a specific place to stay while you’re backpacking through Panama? These are our highest recommendations for places to stay in Panama City.
If you’re traveling 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. Book one of these sweet hostels in Panama City and get ready for the time of your life!
American Trade Hotel | Best Hotel in Panama City
American Trade Hotel is our pick for the best hotel in Panama City because it has a fantastic location in hip and historic Casco Viejo. This 4.5-star hotel features an outdoor swimming pool, a sun deck and free wifi. Rooms come complete with modern amenities and luxury features.
Zebulo Hostel | Best Hostel in Panama City
This is our 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 AC and comfy beds. There’s also wifi and a Jacuzzi. Breakfast is included with each reservation.
Luxury Studio Apartment Suite in Historic District | Best Airbnb in Panama City
Located in the Panama historic area of Casco Viejo, you’ll be in the middle of the action. The luxury studio apartment suite consists of a queen size bed, a sofa bed and a couch and can accommodate up to four guests. It also comes with a TV, a washer and dryer, a bathroom, a stocked kitchen and free access to a swimming pool in the building next door. Because there are nightclubs next door, it can get very noisy on the weekend.
If you’re still not inspired, consider checking out our guide on the best eco-resorts in Panama for a truly unique stay!
Panama City Neighborhood Guide – Places to Stay in Panama City
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 Americas 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 and neighborhoods. In this Panama City neighborhood guide, we’ll explore the five best places to stay based on what you want to do.
Casco Viejo is the best neighborhood in Panama City to stay in if you’re visiting for the first time because it is packed with historic landmarks and tourist attractions. Panama is mostly safe for visitors but do pay attention to your surroundings.
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 neighborhood is our best recommendation for where to stay in Panama City with kids because it has ample green space, lots of amenities, and an abundance of family-friendly restaurants.
Next to El Cangrejo is Obarrio. This district is our 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 5 Best Neighborhoods to Stay in
If you’re still not sure which is the best neighborhood in Panama City to stay in, don’t worry! Because, in this next section, we’re going to look at each neighborhood 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 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. 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 neighborhood is home to some of the best cafes, shops, and bars, as well as an abundance of art galleries, museums, and lively local markets.
Things to See and Do in Casco Viejo
- Choose from a wide range of beers at La Rana Dorada.
- 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.
- Excite your sense at Casa Jaguar Gastropub.
- Marvel at the architecture and design of the marvellous Metropolitan Cathedral.
- Party the night away at Chupitos.
- See creative and innovative works of art at the Museum of Contemporary Art (MAC Panama).
- Sip local rum and dine on delicious dishes at Pedro Mandinga.
- Visit the interesting and informative Museo Panama Viejo.
Las Clementinas | Best Hotel in Casco Viejo
Las Clementinas is a charming two-star hotel in Casco Viejo, one of Panama City’s best neighborhoods. 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 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 swimming 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 neighborhood to stay 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.
Luxury Studio Apartment Suite in Historic District | Best Airbnb in Casco Viejo
Located in the Panama historic area of Casco Viejo, you’ll be in the middle of the action. The luxury studio apartment suite consists of a queen size bed, a sofa bed and a couch and can accommodate up to four guests. It also comes with a TV, a washer and dryer, a bathroom, a stocked kitchen and free access to a swimming pool in the building next door. Because there are nightclubs next door, it can get very noisy on the weekend.
We’ve tested countless backpacks over the years, but there’s one that has always been the best and remains the best buy for adventurers: the broke backpacker-approved Osprey Aether and Ariel series.
Want more deetz on why these packs are so damn perfect? Then read our comprehensive review for the inside scoop!
View on Osprey View on REI#2 Obarrio – Where to Stay in Panama City on a Budget
Set in the centre of the city is the Obarrio neighborhood. It seamlessly blends the modern with the historic and offers visitors an array of architectural styles to admire.
It is also one of the safest and most popular areas of the city for visitors thanks to its great location and proximity to shopping, sightseeing, dining and nightlife.
Obarrio is our 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 neighborhood is a great selection of backpacker hostels and boutique hotels that offer great accommodations at a reasonable price.
Things to See and Do in Obarrio
- Be amazed by the incredible architecture and design of the Parroquia Santuario Nacional del Corazón de María.
- Enjoy a nice coffee, a sweet treat or a meal at Café Unido Marabella.
- Excite your sense with fresh and delicious seafood and Japanese at Restaurante Makoto.
- Feast on delicious pizza, pasta and more at La Locanda.
- Satisfy your sweet tooth at Anthanasiou Obarrio.
- Sink your teeth into a juicy burger at Slabon Café-Bistro.
- Start your day with a delicious breakfast of waffles, eggs and more at Café Madero.
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 swimming pool and an airport shuttle.
Wyndham Garden Panama City | Best Hotel in Obarrio
The Wyndham Garden Hotel is a modern and stylish four-star hotel in Obarrio. It is an excellent option for Panama City accommodation because it is close to bars, restaurants and shops. This hotel has 70 spacious rooms. Guests can enjoy the on-site bar and lounge, and make use of the airport shuttle.
Zebulo Hostel | Best Hostel in Obarrio
This is our 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 AC and comfy beds. There’s also wifi, a Jacuzzi, and lots of games to enjoy. A tasty breakfast is also included with each reservation.
Private Bedroom in Comfortable Apartment in Obarrio | Best Airbnb in Obarrio
This cosy apartment is ideal for those visiting Panama on a budget. Located in one of the safest neighborhoods in Panama, in downtown Panama City, it’s near Via Argentina Metro Station and Via Argentina Boulevard, which is one of the most vibrant touristic area where you can find restaurants, bars, nightclubs and shops. You also have access to the rooftop pool which oversees the city.
#3 San Francisco – Where to Stay in Panama City for Nightlife
San Francisco is a lively and vibrant neighborhood 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 that will meet the wants and needs of all types of travellers. Because of this, San Francisco is our pick for where to stay in Panama City for nightlife.
Love to eat? Then this neighborhood 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 neighborhood is bursting with flavour!
Things to See and Do in San Francisco
- Drink refreshing beers at La Rana Dorada.
- Eat fresh seafood dishes at Guadúa Cocina Ecuatoriana.
- Excite your sense with mouthwatering meals from Pig Backside, The Smoke Truck, and Anti-burger.
- Excite your senses at Taco T.
- Go for a stroll through Omar Torrijos Park.
- Grab a pint at Istmo Brew Pub.
- Shop for new to your gems and treasures at Promises.
- Sip a handcrafted coffee at Leto.
- Try one of the best burgers in the city at Esa Flaca Rica.
Ramada Plaza by Wyndham | Best Hotel in San Francisco
This hotel has a great location in San Francisco, one of Panama City’s best neighborhoods. 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.
Occidental Panama City | Best Hotel in San Francisco
The Occidental is a stylish and modern four-star hotel in lively San Francisco, the best area in Panama City to stay in for nightlife. It is comprised of 143 chic rooms and has great amenities, free wifi, an outdoor terrace and a concierge service.
Nomade Hostel | Best Hostel in San Francisco
Nomade Hostel is conveniently located at the heart of Panama City. This property is close to popular bars and restaurants, as well as shops and tourist attractions. It provides a variety of room options each with air conditioning, linens, towels and soap. There’s also a kitchen and laundry services.
Modern and Stylish Loft Near the Nightlife | Best Airbnb in San Francisco
With one of the best views of the bay and Panama city, this beautiful loft isn’t only very affordable but also a very good pick for where to stay in Panama City. Close to restaurants, supermarkets, cafes and transportation, it’s an excellent base to explore the city. Modern, simple, well-appointed and comfortable, you will sure have a very good time in this beautiful loft.
A new country, a new contract, a new piece of plastic – booooring. Instead, buy an eSIM!
An eSIM works just like an app: you buy it, you download it, and BOOM! You’re connected the minute you land. It’s that easy.
Is your phone eSIM ready? Read about how e-Sims work or click below to see one of the top eSIM providers on the market and ditch the plastic.
Grab an eSIM!#4 Casco Viejo – Coolest Place to Stay in Panama City
Not only is Casco Viejo the best neighborhood for sightseeing and first-time visitors, but it also holds the title as one of the coolest places to stay 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 Casco Viejo’s sidewalk bars or cafes and enjoy a lively and buzzing night of food, drinks, dancing and people watching.
Things to See and Do in Casco Viejo
- Be amazed by the crazy colours and unusual exterior of the Biomuseo.
- Dine on flavoury and savoury tacos at Tacos la Neta.
- Eat waffles, frites and drink Belgian beers at ‘t Bier Klooster.
- Enjoy refreshing drinks and a stunning view at Tantalo Kitchen.
- Excite your senses at Malibu Spirits and Eatery.
- Grab a drink and tasty snacks at Pedro Mandinga Rum.
- Indulge in an amazing meal at the American Trade Hotel.
- Shop, snack and sample your way through the boisterous Pixvae Market.
- Sip and sample local brews at Casa Bruja Brewing Co.
American Trade Hotel | Best Hotel in Casco Viejo
American Trade Hotel is our pick for the best hotel in Panama City because it has a fantastic location in hip and historic Casco Viejo. This 4.5-star hotel features an outdoor swimming pool, a sun deck and free wifi. Rooms come complete with modern amenities and luxury features.
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.
Luna’s Castle Hostel | Best Hostel in Casco Viejo
Luna’s Castle Hostel is a fantastic option for budget Panama City accommodation. It is located in the city’s hottest neighborhood 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.
Spacious and Luxury Apartment Suite in Casco Viejo | Best Airbnb in Casco Viejo
Located in the historic area of Casco Viejo, the most popular area in Panama City, this spacious luxury suite is one of the coolest places to stay in Panama City. The place consists of a bedroom with a queen size bed,a bathroom, a stocked 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.
#5 El Cangrejo – Where to Stay in Panama City for Families
El Cangrejo is a residential, middle-class neighborhood 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 neighborhood is packed with great services as well as restaurants, shops and bars. Because of this, El Cangrejo is our 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 neighborhood 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.
Things to See and Do in El Cangrejo
- Belt out your favourite tunes at Live Karaoke.
- Feast on a cheap and delicious lunch at El Mundo del Pan.
- Head up to The Roof and enjoy cocktails with an unforgettable view.
- Kickstart your day with a filling breakfast at New York Bagel Café.
- 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.
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 AC and a kitchenette.
Toscana Inn Hotel | Best Hotel in El Cangrejo
This is one of our 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 centrally located in El Cangrejo and offers easy access throughout the city. This hostel has both dorms and private rooms with comfortable beds and A/C. There’s also a kitchen, living room, and a relaxing balcony.
Gorgeous Apartment with Swimming Pool in El Cangrejo | Best Airbnb in El Cangrejo
With an outdoor swimming pool, a fitness centre and a garden, this gorgeous apartment is perfect for families visiting Panama City and can accommodate up to six guests. The apartment consists of a fully equipped kitchen, two balconies facing the park and all the essentials you need to have a comfortable stay. Near restaurants and entertainments, it’s an excellent base to walk everywhere and explore the city.
Stash your cash safely with this money belt. It will keep your valuables safely concealed, no matter where you go.
It looks exactly like a normal belt except for a SECRET interior pocket perfectly designed to hide a wad of cash, a passport photocopy or anything else you may wish to hide. Never get caught with your pants down again! (Unless you want to…)
Hide Yo’ Money!FAQ about Finding a Place to Stay in Panama City
Here’s what people usually ask us 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!
Don’t Forget Travel Insurance for Panama City
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.
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, we guarantee Panama City has something for you!
In this guide, we’ve looked at the best places to stay in Panama City. If you’re still not sure which neighborhood is best for you, where is a quick recap:
Casco Viejo is our favourite neighborhood because it has a rich history, bustling nightlife and an array of amazing restaurants. It’s also where you’ll find Zebulo Hostel, our favourite Panama City hostel.
Another great option is the American Trade Hotel because it has a central location, a stunning swimming pool and each room is packed with modern amenities.
- 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.
Photo: @joemiddlehurst
And for transparency’s sake, please know that some of the links in our content are affiliate links. That means that if you book your accommodation, buy your gear, or sort your insurance through our link, we earn a small commission (at no extra cost to you). That said, we only link to the gear we trust and never recommend services we don’t believe are up to scratch. Again, thank you!
