My 6 Favorite Hostels in Panama City

The towering skyline of Panama City surrounded by its lush green parks

Panama City is known as the shipping and financial hub of Central America — but there’s much more to the city than that.

Panama City is a bustling, lively city with a vibrant nightlife, tons of history, and delicious food. It’s a good hub to base yourself for a few days while you plan your next steps.

Since it’s not as cheap as other cities in the region, you’ll want to save money by booking yourself a hostel while you’re here. They’re the most cost-effective (and fun) way to enjoy the city.

However, there are a lot of things to consider when selecting a hostel. The top four when picking the best hostel in Panama City are:

  1. Location – Panama City is huge and it can take some time to get around. Pick a place that is central to the sites and nightlife you want to see. All the hostels listed here are in central locations.
  2. Price – In Panama City, you really get what you pay for, so if you go with a really cheap one, you’re probably going to get a hostel that is small, cramped, and doesn’t offer great service.
  3. Amenities – Every hostel in the city offers free Wi-Fi, and most have a free breakfast, but if you want more than that, be sure to do your research to find the hostel that best meets your needs!
  4. Staff – All the hostels listed here have amazing staff! They are super friendly and knowledgeable. Even if you don’t end up staying at one of the places listed below, be sure to look up reviews to ensure you end up somewhere where the staff is helpful and friendly! They can make or break a hostel!

To help you plan your trip, here is my list of the hostels in Panama City that I like the most. If you don’t want to read the longer list below, the following hostels are the best in each category:

Best Hostel for Budget Travelers: Hostal Casa Areka
Best Hostel for Families: Magnolia Inn Casa Viejo
Best Hostel for Solo Female Travelers: El Machio
Best Hostel for Digital Nomads: Selina Casco Viejo
Best Hostel for Partying: Hostal Casa Areka
Best Overall Hostel: Luna’s Castle Hostel

Want the specifics of each hostel? Here’s my comprehensive list of the best hostels in Panama City:

Price Legend (per night)

  • $ = Under $15 USD
  • $$ = $15-20 USD
  • $$$ = Over $20 USD


1. Magnolia Inn Casa Viejo

The posh interior of the Magnolia Inn Casa Viejo hostel in Panama City
This boutique hostel is located in Casa Viejo, the city’s beautiful Old Town. It’s clean and quiet, making it a good choice for families or travelers looking for some down time. The hostel is an old French colonial mansion and balances historic charm with modern amenities (like AC and Wi-Fi). The beds are basic and don’t have curtains but the mattresses are thick and comfy. There are also a few common areas where you can relax and hang out or watch TV. Since it’s quiet here, I’d suggest staying here if you want to get a good sleep. There are several social hostels nearby where you can grab a drink and hang out, letting you enjoy being social before returning to your quiet hostel.

Magnolia Inn Casa Viejo at a glance:

  • $$
  • Central location in the Old Town
  • Clean and quiet
  • Beautiful interior

Beds from $16 USD a night, rooms from $116 USD.

—> Book your stay at Magnolia Inn Casa Viejo!

2. Hostal Casa Areka

The outdoor swimming pool and hang out area at Hostal Casa Areka in Panama City
This energetic hostel has a pool, outdoor Wi-Fi, space to barbeque, and a spacious kitchen for cooking your own meals. It’s also surrounded by bars and restaurants, making it a good choice for those who want to party. The beds are pretty basic (no curtains for privacy) but are comfortable enough to sleep on. The dorms also only have 8 beds (or less) so you’re never crammed in with other people. There are lots of common areas to relax in and they have female-only dorms too. It’s the cheapest hostel in the city.

Hostal Casa Areka at a glance:

  • $
  • Swimming pool
  • Super affordable
  • Free breakfast

Beds from $9 USD a night, rooms from $35 USD.

—> Book your stay at Hostal Casa Areka!

3. El Machio

The colorful dorm rooms of El Machio Hostel in Panama City
This is a social hostel makes it really easy to meet people here since they have a pool, a small bar, play movies outside in their outdoor cinema, and organize tons of tours (they have affordable trips to the San Blas Islands). The beds aren’t the best. Nothing to write home about but the dorms have lockers to keep your items safe and you’re really staying here for the atmosphere. Brekafast is included, there’s a spacious kitchen for cooking, and the surrounding neighborhood is quite safe too.

El Machio at a glance:

  • $
  • Social atmosphere makes it easy to meet people
  • Free brekafast
  • Female-only dorms for added privacy and security

Beds from $13 USD a night, rooms from $50 USD

—> Book your stay at El Machio!

4. Luna’s Castle Hostel

The cool interior design of Luna's Castle Hostel in Panama City
This is my favorite hostel in the city. Housed in an old colonial mansion overlooking the ocean, it’s a cool backpacker hostel with a laid back vibe. Free breakfast is included, there’s a bar on-site for having fun, and the staff go above and beyond. They organize walking tours and other fun activities to ensure you have an amazing visit and meet cool people during your stay. They only have large dorms (10 or 12 beds) but the beds have curtains and the mattresses are comfy. It’s lively, social, and an institution on the Gringo Trail around Central America.

Luna’s Castle Hostel at a glance:

  • $$
  • Free breakfast
  • Easy to meet people
  • Beautiful location by the ocean

Beds from $16 USD a night

—> Book your stay at Luna’s Castle Hostel!

5. Zebulo Hostel

The spacious and empty dorm rooms of Zebulo Hostel in Panama City
Zebulo has lots of free perks, including free breakfast, free coffee and tea, and a jaccuzzi on-site. While the dorm beds are basic (squeaky metal bunks with no curtains), they’re comfortable enough and not crowded (they cap the rooms at 9 beds). They also organize tons of tours, such as trips to Colombia and the San Blas Islands. They also host lots of weekly events (like BBQ nights). It’s a laid-back hostel that makes it easy to meet people and enjoy all the city has to offer. They also have the cheapest private rooms in the city.

Zebulo Hostel at a glance:

  • $
  • Affordable private rooms
  • Lots of free perks
  • Organizes tons of tours and activities

Beds from $10 USD a night, rooms from $22 USD

—> Book your stay at Zebulo Hostel!

6. Selina Casco Viejo

A classy and spacious dorm room in Selina Casco Viejo hostel in Panama City
Located in the picturesque Old Town (in yet another historic colonial building), Selina is new hostel. It’s a chic, upscale hostel that’s popular with solo travelers and digital nomads. They’ve got a spacious outdoor patio for hanging out and there are lots of bars nearby. The beds are comfy and the showers have hot water (which is a nice perk since many hostels in the city don’t have hot water). There’s AC to keep you cool, a co-working space, a pool table, and lots of common areas for chilling out.

Selina Casco Viejo at a glance:

  • $
  • Lots of common areas to hangout in
  • Social atmosphere
  • Central location in the Old Town

Beds from $14 USD a night, $36 USD

—> Book your stay at Selina Casco Viejo!


Whether you’re looking to party or just want to relax and enjoy your trip alone, you’ll be able to find an affordable hostel in Panama City that won’t disappoint you!

Book Your Trip to Panama: Logistical Tips and Tricks

Book Your Flight
Find a cheap flight by using Skyscanner or Momondo. They are my two favorite search engines because they search websites and airlines around the globe so you always know no stone is left unturned.

Book Your Accommodation
You can book your hostel with Hostelworld. If you want to stay somewhere other than a hostel, use as they consistently return the cheapest rates for guesthouses and cheap hotels. I use them all the time.

Don’t Forget Travel Insurance
Travel insurance will protect you against illness, injury, theft, and cancellations. It’s comprehensive protection in case anything goes wrong. I never go on a trip without it as I’ve had to use it many times in the past. I’ve been using World Nomads for ten years. My favorite companies that offer the best service and value are:

Looking for the best companies to save money with?
Check out my resource page for the best companies to use when you travel! I list all the ones I use to save money when I travel – and I think will help you too!

Looking for more information on visiting Panama?
Check out my in-depth destination guide to Panama with more tips on what to see, do, costs, ways to save, and much, much more!

Photo Credit: 1, 2, 3, 4, 5, 6

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