8 Best Hotels in The Canal and Central Panama, Panama

This private retreat across the bay from Portobelo offers a splendid mix of ocean views, tropical nature, abundant art, friendly service, and fine dining. Accommodations are in four small houses with colorful decor that includes the work of local artisans, as well as such modern amenities as an LCD TV, iPod dock, and Wi-Fi. The houses surround a pool and a bright gazebo that serves as restaurant, gallery, and lounge. The cuisine is a fusion of Caribbean and Continental flavors, with a menu that changes daily, and accommodates guest needs. Large families, or small groups desiring privacy can rent the Casa Grande, up the hill, which has three suites, a full kitchen, and a dining–living room. Basic spa services are available, as are excursions to nearby beaches or colonial fortresses, and fishing, kayaking, hiking, snorkeling, and scuba diving. Folk dancing performances can be arranged, as can the chance to sculpt or paint with a local artisan; the property's wood workshop makes beautiful furniture for the hotel as well as to sell. The restaurant is open to the public for lunch (with reservations only) and day passes are available for nonguests ($120).

Nestled in the forest overlooking the boulder-strewn Guayabo River, this lovely lodge is a mecca for bird-watchers and other nature enthusiasts. Its attractions are honeycreepers, euphonias, hummingbirds, and the other 300 bird species found in the surrounding forest. The sister lodge of the Canopy Tower (weeklong packages combine the two lodges), in Soberania National Park, guest rooms here are bright and spacious, with stylish slate floors, concrete bathrooms, and wide balconies that overlook the river and forest. Meals are served family-style in an airy restaurant-lounge with a self-service bar. There is a good natural-history library, but not one TV to be found. Though rates are steep, they include three meals, and wine with dinner. There is a minimum two-night stay, and with a three-night minimum stay, you get a free introductory nature/bird tour (otherwise all tours cost extra).

Occupying a former U.S. Army radar tower deep in the rain forest of Soberanía National Park, this lodge caters almost exclusively to serious bird-watchers and natural history enthusiasts. Rooms are small and basic, with cement floors, painted metal walls, ceiling fans, and tiny bathrooms, but they have big windows with views of the lower canopy. Suites are roomier, with hammocks and decent-size bathrooms. Guests tend to spend most of their time in the forest, or in the fourth floor dining room/lounge/natural-history library, which has walls of windows that let you look right into the forest canopy. The view from the rooftop deck, just above the treetops, is even more impressive. Three meals per day and one nature tour are included in the price. Additional tours are available for purchase. The minimum stay is three days.

This small B&B occupies a ranch house in a quiet residential neighborhood, just a 10-minute walk from the beach. Guests have access to a large living room with a TV and kitchen, and a deck that overlooks the forest. Guest rooms are bright and clean, with attractive bathrooms and a minibar. Beach towels are provided, and guests can rent golf carts or book day trips. Room rates include transfers to and from the airport or the ferry.

Isla Taboga's best hotel, the Vereda Tropical is perched on the hillside overlooking the Bay of Panama. Its best rooms have views of the town's fishing fleet, cargo ships, and Panama City, which is almost as impressive at night. Rooms have basic decor with high ceilings, fans, colorful bedspreads, and small tile bathrooms. The best rooms have French doors that open onto Juliet balconies with ocean views—well worth the extra money. You may want to eat at the restaurant ($–$$) even if you don't stay here; it's the best kitchen on the island, and the terrace view is gorgeous, though the service can be slow. The eclectic menu includes a good pizza selection, pastas with a choice of about a dozen sauces, lobster served various ways, curried prawns, and paella.

This lovely collection of houses and rooms surrounded by manicured gardens, great trees, and a babbling brook has a tranquil, homey feel. Owners Lionel and Monica Alemán transformed their vacation home into a B&B upon retiring, and the accommodations are certainly homey, with frilled curtains and bedspreads, knickknacks, and cement ducks on the lawn. Ideal for families is either the two-bedroom Linda Vista cottage with a full kitchen, gas grill, fold-out couch, and an adjacent room with a bunk bed, or the suites with three beds. Two rooms in the back of the original home are less expensive: Limoneros, a yellow room, has a lovely private terrace, and the very pink La Vie En Rose has a slightly smaller patio. The policy here is to pamper, as is apparent in the sumptuous breakfasts, and attention provided by the charming, bilingual owners.

This attractive B&B was designed to resemble a Spanish mission, and the owners paid great attention to the details, importing hand-painted tiles and sinks and getting a local carpenter to make replicas of furniture found in southern California missions. The bright rooms have high ceilings with fans and are tastefully decorated with ceramics and Mexican carpets. Suites are double the size, with kitchens and breakfast bars, and cost only $35 more. Rooms open onto a courtyard with a fountain, where the complimentary breakfast is served. The only drawback is that it isn't on a beach—it's in a residential neighborhood a 10-minute walk from playas Cacique and Ejecutiva. Free snorkeling equipment is provided and guests can rent golf carts.