Best Hostels in Panama: Where to Stay for Backpackers
Panama completely surprised us. Before visiting, we didn’t really know what to expect, but after spending time backpacking through the country, it quickly became one of our favourite stops in Central America!
From island life in Bocas del Toro to jungle lodges and buzzing city stays in Panama City, the variety of hostels here is honestly incredible.
If you’re planning a trip, choosing the right hostel can make or break your experience, especially when you’re travelling on a budget. So in this guide, we’re sharing the best hostels in Panama, including everywhere we personally stayed, plus a few top-rated spots across the country.
If you’re just getting started, check out our guide on Things to Know Before Backpacking Panama and our full What to Pack for Panama.
Quick Comparison: Best Hostels in Panama
| Hostel | Location | Price | Best For | Highlight |
| Bambuda Castle | Boquete | $$ | Unique stays | Castle views |
| Palmar Lodge | Bocas del Toro | $$ | Beach vibes | Oceanfront |
| Lost & Found Hostel | Jungle | $$ | Nature lovers | Remote jungle stay |
| Selina Bocas del Toro | Bocas | $$–$$$ | Social travellers | Waterfront pool |
| Blasina Beer Hostel | Boquete | $ | Budget travellers | Free beer vibes |
| Magnolia Inn | Panama City | $$ | Location | Old town stay |
| Hostal Casa Areka | Panama City | $ | Budget | Social hostel |
| Bambuda Santa Catalina | Santa Catalina | $$ | Surf + chill | Pool |
| San Blas Hostels | San Blas Islands | $$$ | Island experience | Beach huts |
Map of the best backpacker hostels in Panama
Our Favourite Hostels in Panama (Where We Stayed)
Bambuda Castle (Boquete)
Price Range: $15–40
Best For: Unique stays, views, relaxing
Standout Feature: Staying in an actual castle
Staying at Bambuda Castle was easily one of the most memorable parts of our trip. It’s not every day you get to stay in a castle, especially one overlooking the mountains in Boquete.
The views are unreal, and there’s something about the whole place that just feels a bit magical. It’s slightly outside town, but that’s part of the charm.
We also ate here a lot (the food is seriously good—especially the steak), which we mentioned in our Where to Eat in Boquete guide.
👉 Check prices on Hostelworld / Booking
Palmar Lodge (Bocas del Toro)
Price Range: $20–50
Best For: Beach lovers, relaxed stays
Standout Feature: Oceanfront location
Palmar Lodge is the definition of chilled island life. Located right on the beach, it’s the kind of place where you lose track of time (in a good way).
It’s perfect if you’re looking to slow down, meet other travellers, and enjoy the laid-back side of Bocas del Toro.
👉 Check prices on Hostelworld / Booking
Lost & Found Hostel (Jungle)
Price Range: $15–35
Best For: Nature, hiking, disconnecting
Standout Feature: Remote jungle location
Lost & Found is one of the most unique hostels we’ve ever stayed in. It’s completely surrounded by jungle, and getting there is half the adventure.
If you want to disconnect, hike, and just enjoy nature, this is the place. We’ve actually written a full Lost & Found Hostel Review if you want all the details.
👉 Check prices on Hostelworld
Selina Bocas del Toro (Now Klika)
Price Range: $20–60
Best For: Social travellers, digital nomads
Standout Feature: Waterfront pool & co-working
Selina (now rebranded in some places) is one of the most well-known hostel chains in Central America.
The Bocas location is right on the water, with a pool overlooking the sea, loads of social spaces, and a mix of dorms and private rooms.
It’s definitely more of a party/social hostel, so keep that in mind depending on your travel style.
👉 Check prices on Hostelworld / Booking
Blasina Beer Hostel (Boquete)
Price Range: $10–25
Best For: Budget travellers, social vibe
Standout Feature: Free beer
Blasina Beer Hostel is exactly what it sounds like—cheap, cheerful, and very social.
Located in Boquete, it’s a great option if you’re looking for a budget-friendly stay while exploring the area. It’s definitely more on the laid-back side compared to some of the party hostels in Bocas del Toro, but still has a really good social atmosphere.
It’s one of the cheap hostels in Panama that still manages to feel fun and welcoming, especially if you’re backpacking Panama and want to meet other travellers without spending too much.
👉 Check prices on Hostelworld / Booking
Best Hostels in Panama City
Magnolia Inn
Price Range: $20–50
Best For: Location, comfort
Standout Feature: Historic building in Casco Viejo
Magnolia Inn is one of the best hostels in Panama City if you want a mix of comfort and location.
Set in the beautiful old town, it feels more like a boutique hotel than a typical hostel.
👉 Check prices on Hostelworld / Booking
Viajero Casco Viejo Hostel (Panama City)
Price Range: $15–40
Best For: Backpackers, social vibe, location
Standout Feature: Rooftop pool & daily events
Viajero is easily one of the best hostels in Panama City right now and a great alternative to older spots in the area.
It’s located right in the heart of Casco Viejo, meaning you can walk to pretty much everything—bars, restaurants, and the main sights.
The hostel itself is super social, with daily events, a rooftop pool, and loads of communal areas, making it ideal if you’re travelling solo or want to meet other backpackers.
👉 Check prices on Hostelworld / Booking
Some older guides still recommend Selina Casco Viejo, but it’s now permanently closed—so we’d suggest staying somewhere like Viajero instead.
Hostal Casa Areka
Price Range: $10–25
Best For: Budget travellers
Standout Feature: Social atmosphere
Hostal Casa Areka is one of the most popular cheap hostels in Panama.
It’s simple, social, and perfect if you’re backpacking Panama on a budget.
👉 Check prices on Hostelworld / Booking
Best Hostels in Santa Catalina
Bambuda Santa Catalina
Price Range: $20–50
Best For: Surf, chill vibes
Standout Feature: Pool & jungle setting
Santa Catalina is all about surfing and slowing down, and Bambuda fits that vibe perfectly.
There’s a pool, great food, and a really relaxed atmosphere—ideal after a day in the ocean.
👉 Check prices on Hostelworld / Booking
Best Hostels in San Blas Islands
Price Range: $80–150 per night (usually includes food + transport)
Best For: Unique island experience, disconnecting
Standout Feature: Beach huts on remote islands
The San Blas Islands are one of the most unique places we visited in Panama—but they’re very different from anywhere else on this list.
There aren’t really any traditional hostels here. Instead, you’ll be staying in basic beach huts or cabins on small islands run by the local Guna community.
Most stays are booked as part of a package, which usually includes:
- Transport from Panama City
- All meals (breakfast, lunch, dinner)
- Island hopping tours
Accommodation is simple (think shared bathrooms, no WiFi, limited electricity), but that’s all part of the experience.
If you’re backpacking Panama, this is one of those places you just can’t miss. Crystal-clear water, tiny islands, and completely switching off for a few days—it’s easily a highlight of any trip through Central America.
👉 Check San Blas tours & stays
Where to Stay in Bocas del Toro
Bocas is one of the best places for hostels in Panama, especially if you’re after a social atmosphere.
Between Palmar Lodge, Selina, and Blasina, you’ve got options for every budget and vibe.
If you’re planning your trip, don’t miss:
Tips for Booking Hostels in Panama
- Use Hostelworld for dorms and social hostels
- Use Booking.com for private rooms
- Book early in peak season (especially Bocas & Panama City)
- Check if breakfast or activities are included (some offer free perks)
Final Thoughts on the Best Hostels in Panama
Panama is one of the best countries in Central America for backpackers, and the hostel scene reflects that.
From jungle hideaways like Lost & Found to beachfront stays in Bocas del Toro and buzzing city hostels in Panama City, there’s something for every type of traveller.
For us, the variety made the trip unforgettable—you can go from hiking in the jungle to relaxing on an island to exploring a modern city, all in one trip.
If you’re planning your own adventure, hopefully this guide to the best hostels in Panama helps you find the perfect place to stay.
Follow Us!
