Where to Stay In Panama City: The Best Areas for First Timers (Old City & New City)

When I was planning my first trip to Panama, figuring out where to stay in Panama City was one of the most challenging parts. After my visit, I can say that your Panama City experience can vary quite a bit depending on where you choose to stay.

I’ve been exploring Latin America between my 9 to 5, sharing what really works, from practical logistics to my experiences and the little details that make planning your own trip feel more manageable. Panama City surprised me more than almost anywhere I’ve been. It’s both modern and historic. I stayed in two neighborhoods during my trip: Casco Viejo first, then the New City. I also explored beyond both. This post is the area-by-area breakdown I wish I’d had before I booked my trip. I’ll tell you what each neighborhood is really like to stay in, who it’s right for, what to watch out for, and how to make the call that fits your trip.

Whether you’re a solo female traveler figuring out safety and logistics, a first-timer trying to make sense of an unfamiliar city, or just someone who wants to spend their limited vacation days in the right place, this is for you.

Why Choosing the Right Area to Stay in Panama City Matters

Panama City is a lively city with diverse neighborhoods, each offering its own special experience. By choosing the right neighborhood to stay in, you can make your trip more enjoyable and stress-free, avoiding any unnecessary complications. 

When it comes to choosing a neighborhood, it’s not just about the photos. It’s about understanding what each neighborhood really offers. The secret to understanding Panama City is that it’s like two cities in one. The Old City (Casco Viejo) is a charming UNESCO-listed historic district with cobblestone streets, rooftop bars, and an atmosphere that’s like stepping into a more relaxed version of Cartagena. On the other side is the New City, a modern city with a skyline of glass towers, international restaurants, and well-maintained infrastructure that looks a bit like Miami if it had decided to move to Central America. 

Let’s get into a bit more detail about the two cities: 

The Old City: Historic, Walkable

Casco Viejo is the Old City’s centerpiece and the only neighborhood in this category. Cobblestone streets, pastel colonial architecture, rooftop bars with views across Panama Bay, and a slow, atmospheric energy that makes you want to stay longer than planned. This is the Panama City that ends up in every travel photo, and it truly lives up to the images in person.

Staying on this side of the city means your trip is built around walking, wandering, and being immersed in the neighborhood’s character. It’s not just like any other international capital.

The New City: Modern, Convenient

The New City is a modern metropolis with a glass-and-concrete skyline that looks like a place straight out of Miami or Singapore.

Four neighborhoods stand out for accommodation, each with a distinct personality:

• Obarrio is a stylish and well-connected neighborhood that offers a great mix of upscale restaurants, cocktail bars, boutique hotels, and a lively atmosphere. It’s the perfect place for first-timers who want the charm of the city without feeling like they’re stuck in an office park.
• El Cangrejo is a more affordable option that feels more like a neighborhood. It’s centrally located. It’s not as aesthetic as Casco Viejo, but it offers great value and is super well-positioned for getting around.
• San Francisco is a quieter and more residential neighborhood with a relaxed vibe, lined with trees, and some of the best-value mid-range hotels in the city. It’s not a nightlife spot, but it’s a great place to stay if you’re looking for lower prices and a local atmosphere.
• Marbella is a polished business district with modern hotels, close to the financial center, and easy access to the Cinta Costera waterfront promenade. It’s a great choice for travelers who want a clean and efficient base and easy airport logistics.

If you’re staying on this side of the city, your trip is all about convenience, modern amenities, and easy logistics. It’s the perfect choice if you want a comfortable and hassle-free base, or if you have an early morning departure to San Blas, Bocas del Toro, or the airport.

The Best Areas to Stay in Panama City: What You’re Actually Choosing Between

Cascjo Viejo: Best for First Timers & Solo Travelers

Casco Viejo, a UNESCO World Heritage Site in Panama City, is a charming neighborhood with pastel colonial buildings, narrow streets, rooftop terraces, and numerous restaurants, cafes, and bars. It’s an ideal destination for first-timers and solo travelers due to its walkability. The neighborhood’s compact size allows for easy exploration and an overall easy travel experience.

I stayed in Casco Viejo for the first part of my trip and found it to be the perfect choice. From my morning coffee on a cobblestone street to my evening drink on a terrace overlooking Panama Bay, the neighborhood’s unique atmosphere is truly captivating.

While the renovated streets around the main plazas, restaurant district, and areas near popular hotels are safe and comfortable, including for solo female travelers, the character of the neighborhood changes abruptly and not always clearly.

To ensure a safe and enjoyable experience, I recommend staying on lit, populated streets at night, using Uber instead of walking unfamiliar routes, and booking a hotel in the center of the neighborhood. For more detailed information on safety in Panama, refer to my guide, “Is Panama Safe for Solo Female Travelers?”

• Best for: If you’re a first-timer, a solo female traveler, a couple, or enjoy the vibe, walkability, historic architecture, or rooftop bars.
• Consider other options: if you’re traveling early, on a tight budget, or need modern amenities.
• Prices range from $80 to $200 per night, but budget-friendly options are available.
  

Obarrio: More Business Focused, Quieter

Obarrio is the New City, and is in the heart of Panama City’s upscale commercial zone. If you stay here, you are close to businesses, and you’ll find some of the city’s best cocktail bars, upscale restaurants, and a lively nightlife that feels social and alive without being too overwhelming. It has a different vibe from the corporate-leaning Marbella or the quieter residential streets of San Francisco. 

The hotel options here range from cozy boutique properties to modern mid-range options, many of which are within walking distance of Via Argentina, a leafy pedestrian-friendly street lined with cafes, art galleries, and local shops that gives the neighborhood a unique feel you don’t always find in the New City.

Logistically, Obarrio is centrally located, making it easy to Uber anywhere in the city quickly. Casco Viejo is about 15 minutes away, and the airport is about 35 minutes away. 

• Best for: Travelers who want the convenience of the New City but with more personality than a pure business district. It’s also excellent for anyone who wants to combine work and leisure. It’s a great all-rounder for solo travelers, couples, and first-timers who prefer modern infrastructure over historic atmosphere. 
• Not ideal for: Budget travelers (pricing is mid-range to upscale). Travelers who specifically want the colonial charm of Casco Viejo.
• Price range: $90–$180+ per night for most quality properties.

Search for Obarrio Hotels  

El Cangrejo: Budget Friendly, More Local

If you’re looking for a central Panama City base without breaking the bank, El Cangrejo is the place for you. It’s a more residential area with a local vibe, away from the fancy hotels and rooftop bars of Casco Viejo and Obarrio. You’ll find clean and well-run mid-range and budget hotels right in the heart of the neighborhood, close to local bakeries, grocery stores, pharmacies, and all the essentials for a comfortable stay.

One of the best things about El Cangrejo is Calle Uruguay, a vibrant restaurant strip that runs straight through the neighborhood. Even if you’re staying at the most budget-friendly hotel, you’ll still be close to some seriously good food, from local Panamanian to Japanese to Peruvian. That’s a big deal!

El Cangrejo is also super convenient for Uber and has an Uber passing through. The area is best if you want easy transport and easy access to a lot of things. 

Marbella: Upscale Feel, Luxury

Marbella is the heart of Panama City’s financial and business district. You’ll find the city’s most modern and fancy hotels here. There are international chains and well-appointed independent hotels, reliable WiFi, consistent amenities, and a professional hotel experience that business travelers and those who travel for work really appreciate.

If you’re looking for a modern, clean, and predictable hotel experience after a long day of travel, it’s perfect. The financial district is home to a lot of international restaurants, so you can eat well without having to go far from your hotel.

In terms of logistics, Marbella is the best-positioned of the five neighborhoods. It’s one of the closest areas to Tocumen Airport, and the wide, well-lit streets make it easy to get an Uber pickup at any time, even early in the morning for flights to San Blas or domestic flights.

• Best for: Business travelers, logistics-focused leisure travelers, and anyone with very early morning departures. If you want maximum modern amenities and predictable hotel quality, this is the place for you.
• Not ideal for: First-time visitors who want to experience the local character or atmosphere. & budget travelers. This area is mid-range to upscale. The area is also not ideal for travelers who want to meet new people.
• Price range: $90–$200+ per night. You’ll find the highest concentration of chain hotels and the most consistent amenities of any area covered here.

San Francisco: Quieter, Family Focused

San Francisco is a residential area with a quieter feel compared to the bustling Obarrio or the touristy Casco Viejo. It’s a slower-paced place, and you will find that most families live there. San Francisco is right next to the waterfront and close to Parque Omar, one of Panama City’s biggest parks. It’s a great place to go for a run or walk before the heat gets too bad. The neighborhood also borders Punta Pacifica, which is a more upscale area. That means you’ll be close to the city’s best shopping centers and restaurants, but without paying Punta Pacifica prices.

When it comes to hotels, San Francisco leans towards reliable mid-range options rather than boutique or luxury. You won’t find the same concentration of atmospheric independent hotels as Casco Viejo or Obarrio, but what you will find is solid value, comfortable rooms, and a neighborhood that feels like it’s been lived in.

• Best for: Travelers who want peace without breaking the bank. Families,  extended stays, couples who don’t need nightlife nearby, and anyone who finds the tourist-heavy neighborhoods too overwhelming.
• Not ideal for: Solo travelers who want to meet new people. First-timers who want to explore the city on foot and experience the nightlife.
• Price range: $60–$130 per night: competitive mid-range pricing with good quality for the cost.

The right area to stay for your Panama Trip

• If you’re a first-time visitor and you’re planning to stay for 5–7 nights, you’ll want to start in Casco Viejo. It’s the most immersive, walkable, and it’s the perfect place to get a taste of the city’s culture and history.
• If you’re a first-time visitor who wants the convenience of the New City but also wants to experience the personality of the city, Obarrio is the best choice for you. It’s the best all-rounder in the New City. It has more social energy and neighborhood texture than Marbella or San Francisco, but without the historic navigation learning curve of Casco Viejo.
• If you’re on a tight budget or you’re planning to stay for an extended period of time, El Cangrejo is the best option for you. It’s the best value per dollar, with the most affordable options and Calle Uruguay right on your doorstep. It’s practical and central without the tourist premium.
• If you’re looking for peace and a more family-oriented stay, San Francisco is the perfect choice for you. It’s residential, tree-lined, and genuinely relaxed. It has good mid-range options at prices that don’t match the central neighborhoods.

• If you’re planning an early-morning departure and want maximum logistical ease, Marbella is the closest to the airport in the New City cluster. It has the easiest access to Uber and the most predictable hotel amenities. It’s the perfect last night before your flight.
• If you’re splitting a week between Panama City and the islands or mountains, Casco Viejo is the first place you should visit. Then, you can visit the new city. This way, you’ll get immersed in the city’s culture and history, and then you can relax and enjoy the rest of your trip. This is exactly how I structured my own trip, and it worked really well.

Tips for Booking Your Panama Accommodation

Here are some quick tips to help you book your accommodation in Panama City:

• Check the exact pin location before you book. Especially for budget properties in or near Casco Viejo, some listings look great on paper but are actually located on the outskirts of the neighborhood rather than its center. Before you book, make sure to check Google Maps for each address to ensure you’re getting the right location.
• Read recent reviews, especially for safety and location. Reviews that mention “felt comfortable walking back at night” or “great location near the plazas” are more helpful than star ratings alone for this kind of decision.
• Use sites like Booking.com & Expedia for the widest selection and flexible cancellation. This is where I usually start my search for Panama City hotels across all five neighborhoods. The location filter works well, and cancellation policies tend to be more flexible. Search Panama City hotels →
• For tours and activities that you want to do while you’re in Panama City, I recommend booking them through GetYourGuide. It’s easy to manage, or you could reach out to other operators directly.

I hope these tips help you plan your trip to Panama City!