Let's not mince our words: capital cities in Central America swing between ugly metropolis and downright scary. So, it came as a bit of a relief that our last country before South America had something a little different to offer.
However, Panama City, wIth its modern sky-scrapers, high-fashion shopping centres and expensive eateries, can make those on a bit of a budget want to hot-foot it right out of town.
We spent a week there with family (who kindly footed the bill for our week long accommodation - cannot express the joy of hot showers, air-con and our very own washing machine!) so we could still afford the odd meal out, groceries and some of the pricier activities. However, we still had our £30/day heads on when it came to activities around the city.
Thankfully for those watching the pennies, you really don't need that long to see all that this city has to offer. So, pick the hostel that won't cost an arm and a leg, top up your travel card and head out enjoy some of the capitals budget top-picks.
#1 casco viejo
By far the prettiest part of town, Casco Viejo is the jewel in Panama City's crown. Following the announcement that it had been declared a UNESCO World Heritage Site, the old centre came back to life. Pain-staking restoration work has sensitively returned once dilapidated buildings to to their former glory and even a few hours spent wandering the streets will have you pondering whether they are some of the prettiest in Central America.
The good news is that to enjoy the best of the old tow costs you nothing. However, if you wish to have a coffee, ice-cold beer or a nice meal out, you'll find that this is a pretty pricey area.
There are a number of museums in the area, but we chose not to visit them. This may or may not have been because we found 2-4-1 mojitos round the corner.
How to get there: You have a few options, of varying cost. The cheapest is actually free - just walk along the Cinta Costera. Second cheapest is find a bus with Mercado Mariscos on it and walk the few blocks, or thirdly, take a taxi - this should only cost $4 but may require some haggling.
Cost: Entirely transport dependent, but almost free!
#2 panama viejo
Panama City is a sprawling metropolis, whose original centre is now located on the outskirts. Founded in 1517, a pirate attack just over 150 years later meant a relocation to what is now known as Casco Viejo.
It is the fact that it was relocated rather than rebuilt which now makes it a UNESCO world heritage site.
And best of all, a trip here could be completely free!
Unless crumbling ruins are what get you all hot and sweaty, it's unlikely to be the most exciting thing you'll see or do on your trip but the restored cathedral providing views over the city is well worth a look.
How to get there: Jump on any bus with 'Panama Viejo' on the front of it. Keep an eye out for the artisan market on the right hand side, and it's the bus-stop after that.
Cost: We didn't actually pay anything, but we're not entirely sure this is correct. There's definitely a fee to enter the museum, which also includes entrance to the ruins - for foreigners this is $8, but it's not clear from their website or other on-line research whether there is a fee to just visit the site.
#3 cinta costera
Inspired by the Aterro do Flamengo in Rio de Janeiro, the Cinta Costera (coastal strip) is an ideal place to enjoy green spaces without leaving the city limits. Running along the Bay of Panama, the strip links the modern sky-scrapers of Punta Paitilla to the historic streets of Casco Viejo.
Our recommendation would be to start at Punta and head west at your own speed. If you get tired, take a seat in one of the many green areas, admire the view and grab a cold drink. In the evening, this is also a really popular running and exercise area.
Word of warning - start early in the day! We undertook this walk with visiting family not acclimatised to the heat, and it proved to be a little too hot!
How to get there: If you're not staying in Punta Paitilla, either hop on a bus (many of the metrobuses and Diablos Rojos go via Punta) or walk to the start.
#4 amador causeway
A popular running trail, the Amador Causeway is a long road connecting Panama City and the four small islands of Naos, Perico, Culebra and Flamenco.
Initially built (amidst much protest) to protect the Panama Canal, it now attracts locals and tourists alike looking to indulge in recreational activities.
The best way to take in the views and stretch your legs is by hiring one of the many bikes you see cruising up and down the path - bike rental starts at around $4 per hour, or you can hire a double bike cart for $10 per hour (technically these are designed for two, but we definitely saw some much fuller than this!)
How to get there: You have a couple of options - take a bus to 5 de Mayo then a taxi to the Causeway ($0.25 for the bus and then either collectivo taxi for $1 per person, or entire taxi for around $5) or take the bus to Chorillo and then connect with the Amador bus (costs $0.50 but much slower)
Cost: $0.50 - $5.25
#5 panama canal
The canal is one of those sights that you just can't miss. Not because it's particularly exciting, entertaining or really that interesting, but because you feel you have to. Recognised as one of the 'seven modern wonders of the modern world', you'd be hard-pressed to find anyone who's spent time in the city and hasn't been separated from a few too many of their hard-earned dollars to watch the big ships pass by (the entry fee for foreigners is extortionate!)
The best thing us budget-backpackers can do is keep a day spent canal-side as cheap as possible.
A word to the wise, the big ships come in between 9 a.m. and 11 a.m, and then again between 2 p.m. and 5 p.m. so make sure you arrive within these time frames - or you'll spend a lot of time waiting around! The museum is also pretty good for explaining the history, development and purpose of the canal.
How to get there: There is no escaping the $18 entry fee but at least travel costs can be kept to a minimum. From Albrook station you have two bus options, the easiest by far being the metrobus. Just look for the one with Miraflores on the front and it will drop you off right in front of the visitors centre, for just 25c.
Cost: $18.25 per person
how expensive is panama city?
When we returned to Panama City on our own, before finding the cheapest way to get to Colombia , we just managed to stick to our £30/$50 joint-budget, but that was largely because we did very little. If we had done any of the usual activities on a 3-day itinerary, we'd almost certainly had gone over.
Accommodation: We had no option but to stay in dorms as cheap doubles were around $35+. Budget backpackers should avoid staying in the Casco Viejo area, and instead opt for the cheaper dorms in the city - the best value being those we found at Mamallena ($10 per dorm bed per night). It isn't in a great area but it's fine for a few nights. Other hostels will charge around $14-18 - like Los Mostros (where we spent three nights), a more centrally located hostel in a far more pleasant area with a pool!
Transport: Bus travel around Panama City is modern and very cheap - although only after you buy $2 travel card. Buy these as soon as you arrive at the bus station (they're not available for purchase in the airport) - a journey outside peak time costs $0.25.
Food: Panama City has some great restaurant options in Casco Viejo and Calle Uruguay, but impossible on our budget. Local hole-in-the-walls are however affordable and most hostels have kitchens.