Last Updated: 2/1/23 | February 1st, 2023
As part of my desire to give you the best budget travel tips I can, I’m continuing my informal series on country costs. Everywhere I go, I write down how much I spent and do a detailed post-mortem on my expenses, so you go in better informed!
This time, we’re going to look at the cost of traveling around Panama.
I first visited Panama in 2018 with the goal of spending only $35 USD per day.
How did I do?
I spent $1,674.81 USD in 28 days, which is an average of $59.81 USD per day.
Why did I fail? I ate good food. Lots of good, expensive food.
I found too many good restaurants in Boquete and Panama City — and I couldn’t resist.
(Plus, for a while, I was traveling with a girl and sometimes I was paying for two, which, additionally, meant I didn’t always stay in hostel dorms.)
But that doesn’t mean traveling Panama is expensive.
While Panama is more expensive than other countries in Central America, it is not the most expensive country in Central America (that’s Costa Rica).
It’s very easy to visit Panama on a limited budget, and, as a budget traveler, get close to my original number. While prices have increased since my first trip, it’s very possible to backpack Panama on a budget of around $45 USD per day. Here’s how.
Table of Contents
How I Spent My Money in Panama
First, let’s talk about how I spent my money in Panama and why I failed in a little bit more detail so you can get an idea of what went wrong. Here’s how much I spent in Panama during my trip, broken down by category:
- Food: $748.20 USD
- Accommodation: $608.20 USD
- Drinks: $142 USD
- Transportation: $131.41 USD
- Activities: $45 USD
As you can see, I spent most of my money on food and accommodation.
But there’s no doubt in my mind you can do Panama for under $50 USD per day.
If you take out the costs of my non-dorm accommodation ($250 USD) and my upscale eating ($300 USD), my daily average becomes $40.17 USD, which is a lot closer to my original goal. Take away a few Western meals, some nights out, and the taxis I poorly negotiated in Panama City, and you’re right around $35 USD.
Since my trip, prices have increased a bit so a good backpacker budget for Panama is now around $45 USD. Still very affordable!
At $45 USD a day, you’ll be staying in hostel dorms ($10-30 USD per night), eating at small, local restaurants and food stalls ($4-10 USD per meal), taking public transportation, drinking very little ($2.50 USD), and sticking to mostly free or cheap activities like free walking tours, museum visits, and enjoying the beach.
On that “backpacker” budget, you could do Panama on the cheap but that would leave no room for any activities, nights out, shopping, or appeasing sudden desires for pizza.
If you want some wiggle room, I would say that $55 USD per day is a better budget for a backpacker. This way, you’ll have extra room for the accidental costs that always come up on the road and any last-minute changes or activities you decide to do.
I always say, it’s better to over budget than under budget!
Additionally, if you wanted a slightly more luxurious trip through Panama with private accommodation and better food, a budget of $100-150 a day is much more realistic. That’s a mid-range budget that adds some comfort and convenience while still being relatively affordable.
If you want to stay in three-star hotels, take taxis or rent a car, drink more, do guided tours and excursions, and eat out at nicer restaurants, I’d budget $220 per day or more for your travels around Panama. This is a borderline luxury, however.
How Much do Things Cost in Panama?
To help you plan your trip to Panama, here are some common prices you can use as a reference point when outlining your trip:
- Bottle of water/Cola – $1.29 USD
- Hostel dorm – $10-20 USD per night
- Local bus ticket – $0.35 USD
- Cheap restaurant – $4-9 USD
- Mid-range restaurant – $20 USD
- Week’s worth of basic groceries – $35-50 USD
- Flight from Panama City to Bocas del Toro – $140 USD (one way)
- Bus from Panama City to David – $20 USD
- Bus from Panama City to Boquete – $23-25 USD
How to Save Money in Panama
There are plenty of ways to save money in Panama and lower the cost of your trip without sacrificing too much quality. If you travel like how the locals live, you’ll be able to afford anything here! Here are my top tips for saving money:
1. Avoid taxis – I found taxis here to be a complete rip-off. As my friend JP says, “You get gringoed.” They were also far more unwilling to negotiate than in places like Asia. I’d try to avoid them if at all possible. If you do use them, keep in mind that they are not metered so you’ll have to agree on a price in advance.
2. Car-share – If you do take taxis, share your ride. Most taxis are usually shared anyway. Drivers will pick up people even if someone else is in the car. This reduces your price since if he’s already going your way, he’ll be more inclined to give you a better price.
3. Refill your water – In most of the country, you can drink the tap water. It won’t kill you or make you sick. Bocas del Toro is one of the few exceptions where you shouldn’t drink the tap in Panama. There’s no need to always buy new water bottles. Save yourself a few dollars a day and fill up from the tap. Lifestraw makes a reusable water bottle with a built-in filter to ensure your water is always clean and safe.
4. Stick to beer – Beer is usually $0.50-$1 during hostel happy hours so stick to beer, spend less, and save more without cutting into your good time.
5. Avoid hot water – Get rooms with cold-water showers. Hot water usually costs a lot more. It’s so hot here anyway, you’ll hardly ever want hot water. Even I got used to cold-water showers, and I get cranky without hot water!
6. Do Airbnb – If hostels are not your thing, use Airbnb. It’s cheaper than traditional, expensive hotels and incredibly widespread in the country, especially in the larger cities.
7. Carry small change – Most taxis and small shops won’t accept larger bills for small purchases so make sure you carry change.
8. Travel in the offseason – Most people visit Panama between January and April. The weather is drier during this time, but prices are higher. Consider visiting during the rainy season (May-November) to save money. As long as you’re sticking to the coasts, the rainfall will be brief, and you’ll have plenty of time to enjoy the sun.
9. Embrace the bus – Long-distance buses in Panama are leagues above the infamous “chicken buses.” While a far cry from luxurious, they are good enough for long-distance journeys if you’re on a budget (there are still plenty of chicken buses though if you want to give them a try!).
10. Stay with a local – There are hosts (and lots of community events) in the larger cities of Panama, making this a great country to Couchsurf in. It’s the best way to save money and pick up some insider tips. Just make sure to send your requests early.
11. Barter hard! – If you’re hopping ferries around Bocas del Toro make sure you barter. Much like the taxis in the city, you’ll likely be charged more than the locals so barter hard and make sure you know what you should be paying in advance.
Panama doesn’t need to be expensive. Sure, it’s one of the more expensive countries in the region, but it’s very easy to travel on the cheap here if you plan ahead, limit your meals out (and drinks), and stick to cheap accommodation.
Do that, and you’ll be able to have a fun budget-friendly trip to this amazing destination!
Book Your Trip to Panama: Logistical Tips and Tricks
Book Your Flight
Use Skyscanner to find a cheap flight. They are my favorite search engine 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 as they have the biggest inventory and best deals. If you want to stay somewhere other than a hostel, use Booking.com as they consistently return the cheapest rates for guesthouses and cheap hotels. My favorite places to stay are:
- El Machio (Panama City)
- Bambuda Castle (Boquete)
- Bambuda Lodge (Bocas del Toro)
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. My favorite companies that offer the best service and value are:
- Safety Wing (for everyone)
- Insure My Trip (for those over 70)
- Medjet (for additional evacuation coverage)
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’m on the road. They will save you money when you travel too.
Want More Information on Panama?
Be sure to visit our robust destination guide to Panama for even more planning tips!