Where to Stay in Panama City, Panama: The Best Hotels & Neighbourhoods

Planning to visit Panama? Whether you have 10 days in Panama or two weeks, you’ll likely spend a least a day or two in Panama City. But like so many cities in Central America, choosing where to stay in Panama City isn’t always straightforward.

The good news? The best hotels in Panama City offer excellent value for travellers. You can get superb lodgings in Panama’s capital without breaking the bank. The challenge? The best areas to stay in Panama City are limited. As you’ll soon find out, you’ll want to avoid certain neighbourhoods & districts. It adds a layer of difficulty to your search for the perfect hotel in Panama City.

Ready to sort out your Panama City accommodations ? Follow along with this complete guide to the best places to stay in Panama City, Panama…

Best places to stay in Panama City

Decided to spend at least one day in Panama City on your latest Central America trip? One of the first things you’ll need to suss out is where to stay in Panama City. And since this is Central America, the answer isn’t always going to be a clear-cut.

Church in Casco Viejo, Panama City, Panama

Unlike in other world cities, you shouldn’t choose a hotel in Panama’s capital willy-nilly. Although safer than most of its Central American peers, there are areas in Panama City you should stay away from.

Need an idea of where to start? The best areas to stay in Panama City for travellers include:

  • Casco Viejo is Panama City’s historic Old Town and the most charming area in the city. For travellers looking for a typical Panama City sightseeing experience, this is the best, if not the safest, area to stay.
  • Obarrio & El Cangrejo is a pair of neighbourhoods in the downtown area. They offer Panama City’s top selection of mid-range & luxury hotels. Hotels here offer better value than most in Casco Viejo. The areas also have a better reputation for safety. These districts are a great choice for accommodations in central Panama City.
  • Marbella is a seaside neighbourhood on the fringes of downtown. It offers a more local flavour than other city centre locations. There’s a good selection of budget-friendly accommodations in this area for travellers looking to save. It’s also home to a handful of great mid-range and luxury hotels.

Casco Viejo

✓ Best area to stay in Panama City for history & culture 

Searching out the most charming area in Panama City? You don’t need to look any further than Casco Viejo, Panama City’s Old Town. This historic quarter, known to locals as San Felipe, features a lovely collection of old colonial buildings. Inside, they house some of the city’s best restaurants, museums & bars.

Yes, Casco Viejo is quite the head-turner, enough so for UNESCO to declare it a World Heritage site in 1997. Since then, Panama’s filtered in funds to improve the area and restore it to its former strapping self.

Street Casco Viejo Panama City

While Casco Viejo sits among the best places to stay in Panama City, it’s not exactly the safest area in town—even if it’s come a long, long way.

At night, be sure to stick to well-lit streets and avoid wandering off into the fringes of the district. Some of the bordering areas like El Chorrillo, Santa Ana, and San Miguel don’t have the greatest reputation.

Recommended hotels in Casco Viejo

With the compact nature of the area, there’s isn’t a massive selection of accommodations in Casco Viejo. Most of what you’ll find are small boutique hotels & guesthouses. For its picturesque location, expect to room prices to trend towards the upper-end for Panama City. Prices are especially high during tourism high season.

Ready for the perfect room? Here are a few of the best hotels & places to stay in Casco Viejo:

  • Magnolia Inn: This guesthouse is one of the better budget choices in Casco Viejo. It occupies a lovely renovated colonial manor with an interior that matches its stunning façade. Both dorms and private rooms with private bathrooms are offered. Hang out on the graceful terraces for winsome views out to Old Town.
  • Hotel Casa Panamá: This charming boutique hotel charms with rustic touches. It exudes a unique vibe out of the Central American norm. The views and the cheap cerveza at the hotel’s rooftop bar are worth the stay alone. (And let’s not forget the year-round outdoor pool to beat the oppressive Panama City heat!)
  • Las Clementinas: Central America’s not known for spacious accommodations. The gargantuan suites in this mid-range hotel come as a surprise. Even if you opt for a smaller double room, the leafy & relaxing shared balcony and terrace will make up for the lost space.
  • American Trade Hotel: This enchanting colonial hotel fits in perfectly in Old Town Panama. It’s not hard to imagine a lonely early-20th century writer scrawling their Great American novel here. The handsome old façade of this luxury hotel leads into a hip & modern interior. The contemporary vibe continues into the rooms. Dark wood grains add a dash of elegance and sophistication, yet still remind guests of Panama City’s seaside roots. Cool down with a dip in the pool or relax to a spa treatment to get the full American Trade Hotel experience.

Obarrio & El Cangrejo

✓ Best area to stay in Panama City for mid-range & luxury travellers seeking out a safe, central location

Located in downtown, the districts of Obarrio & El Cangrejo are among the top areas to stay in Panama City. They’re a great option for travellers seeking high-quality accommodations in a central neighbourhood.

Panama City Skyline

Unlike Casco Viejo, Obarrio & El Cangrejo lean towards the modern rather than historical. Even so, there’s plenty to warrant a stay in these downtown areas. They’re home to everything from beautiful parks to superb restaurants.

In a Central American urban hotspot like Panama City, safety is often a concern. One of the bonuses of Obarrio & El Cangrejo are that they slot among the city’s safest areas. The neighbourhoods are located in the heart of city’s financial district. As long as you follow usual precautions, you shouldn’t run into any trouble here. (We can’t say the same for districts elsewhere in Panama City.)

Recommended hotels in Obarrio & El Cangrejo

Obarrio & El Cangrejo deliver some of the best mid-range & luxury accommodations in Panama City. Hotels here offer better value than in the more popular sightseeing district of Casco Viejo. There’s also a much larger selection of options to choose from.

On the hunt for the perfect room? Here are a few of the best hotels & places to stay in Obarrio & El Cangrejo:

  • Eurostars Panama City: This ultra-stylish hoteldelivers well beyond its budget-friendly price point. Unwind in the 6th-floor sauna & Turkish bath. Or enjoy skyline vistas on the 27th-floor outdoor pool to get the most out of your stay.
  • Hyatt Place Panama City Downtown: This mid-range hotel is my own personal favourite in the price range. The Hyatt Place Panama City Downtown occupies a great location in the centre of town. It offers guests extras like an outdoor pool and breakfast buffet. The mega skyline views onto the financial district from select rooms are jaw-dropping.
  • Global Hotel Panama: This 4-star hotel is another superb choice for downtown. It features large comfortable rooms with more than a dash of contemporary style. Cool down in the outdoor pool to tremendous views over Panama City; it might well be one of the highlights of your trip.
  • W Panama: This 5-star hotel is another home run from one of the world’s top luxury chains. This delectable luxury hotel is ritzy and stylish. It pulls out all the stops to ensure your stay in Panama City is magical. Splurge for one of their spacious Fabulous King Rooms. You’ll get to catch the hotel and the skyline at its best from your private balcony.


✓ Top place to stay in Panama City for a local feel in a safe central neighbourhood

The Marbella area is located at the bayfront on the southern fringes of downtown. Marbella is one of the top neighbourhoods to stay in Panama City for travellers looking for a more local vibe in a central location. The area is popular with expats who love the quiet residential feel of the district. Yet, it’s still steps from the heart of the city.

Panama City Skyline and Panama Bay

Unlike the more developed city centre areas further north, Marbella still hints of old Panama. There’s quite a bit of colonial-style architecture here that escaped the building boom.

Those looking for typical tourist attractions won’t find much in Marbella. There are plenty of local restaurants, shops & bars to while away your time here though.

Recommended hotels in Marbella

With its compact size, there’s a limited selection of accommodations in Marbella. You’ll see a little of everything though. Whether budget-friendly hostels & guesthouses or mid-range & luxury hotels, you’ll find them here.

Get your search started with a few of the best hotels & places to stay in Marbella:

  • El Machico Hostel: This hostel raises the bar among Panama City budget accommodations with its outdoor pool. Both dorms and private rooms are available for guests.
  • Hotel Sercotel Panama Princess: This 3.5-star hotel is another pick that won’t break the bank. It offers simple comfortable rooms—even if they feel a bit tired at times. You’ll also find a few extras like an outdoor swimming pool, spa & sauna.
  • Hard Rock Hotel Panama Megapolis: This 4.5-star hotel electrifies in a way that only a Hard Rock could. The stylish high-rise hotel delivers with views over Panama Bay. The rooms are spacious and colourful. The real treat here, though, are the rockstar-worthy amenities. They include an outdoor infinity pool, sauna, spa & rooftop lounge. The Hard Rock Hotel Panama Megapolis also hosts ten on-site restaurants & bars.
  • Waldorf Astoria Panama: This luxury property is among Panama City’s best. This 5-star hotel takes full advantage of its seaside location. It delights guests with million-dollar views from its spacious modern rooms and outdoor infinity pool.

Summary: The best hotels in Panama City

  • On a tighter budget? Marbella’s El Machico Hostel is one of the best budget-friendly choices in Panama City. The outdoor pool puts these accommodations well ahead of others in the price range.
  • Looking for a great mid-range hotel? I can’t recommend Hyatt Place Panama City Downtown enough. Combining superb service, amazing skyline views, and an excellent central location, it’s hard to do much better than this gem.
  • Craving the ultimate in Panamanian luxury? You can’t go wrong with W Panama. This 5-star luxury hotel features spacious rooms with über-modern furnishings and decor. They’re accented by incredible skyline views. The outdoor pool area is also fantastic.
Ryan O'Rourke

Ryan O'Rourke is a Canadian traveller, food & drink aficionado, and the founder & editor of Treksplorer. With over 20 years of extensive travel experience, Ryan has journeyed through over 50 countries, uncovering hidden gems and sharing firsthand, unsponsored insights on what to see & do and where to eat, drink & stay. Backed by his travel experience and in-depth research, Ryan’s travel advice and writing has been featured in publications like the Huffington Post and Matador Network. You can connect with Ryan on Twitter/X at @rtorourke.

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