Simple but pleasant and quiet B&Bs are beginning to pop up in the old Canal Zone towns of Balboa  and Ancón. The latter is on the side of Cerro Ancón  and now includes the former U.S. Army base of Quarry Heights, formerly the headquarters of the U.S. Southern Command.
Evidence of the latter still exists in the form of “The Tunnel,” a high-security command post drilled straight into the side of Cerro Ancón that was used for strategic planning in times of crisis.
These areas have the advantage of remaining quiet, tree-shrouded residential neighborhoods that are right next door to the urban chaos of Panama City .
Tranquil as this area is, it’s important to exercise some caution, especially at night. Streets can be dark and deserted, and the incidence of home break-ins has shot up with the demise of the Canal Zone. Violent crime is unlikely, however. The places listed here all have good security, including locked gates.
Dos Palmitos (532B Guayacan Terrace, Ancón, cell 6581-8132 or 6759-0410, in Europe: 331/7377-7341, Skype: Dos Palmitos, www.dospalmitos.com , US$85 s, US$98 d, including breakfast) is another B&B in former Canal Zone housing. This one is of the older, two-story wooden variety, which has a bit more character. The B&B features four small rooms, all of which are clean and have simple but attractive decor, new bathrooms, comfortable beds, flat-screen TVs, free Wi-Fi, hardwood floors, and air-conditioning.
This is not a posh place; it’s clearly a home that’s been converted into a simple B&B. But it’s immaculate and run well by a hands-on owner and is a good base for independent travelers who want to explore this part of Panama. It’s a hidden gem.
The neighborhood is not as well tended as it was in the old Canal Zone days, but this is still a quiet residential area, especially given that the crowded streets of Panama City are just a short walk away. There’s a shared kitchen and common area with an Internet computer. Breakfast is served on a back terrace overlooking a walled garden. This is another place where you’re more likely to hear birdsong than traffic.
Dos Palmitos is run by Angeline Arnken, a Dutch journalist with an interest in the history of Panama and the canal—be sure to notice the historic photos on the wall, as well as the framed newspapers and stock certificate from the era of the French canal fiasco. She speaks French, Dutch, English, Spanish, and German. She lives on the ground floor of the house, so she’s often around. She can arrange tours at very reasonable prices, including day trips to El Valle and Santa Clara (US$40 per person) and Gamboa  (US$35).
Best of all is a tour that overcomes the problem of taking the Panama Railway  across the isthmus. For US$60 per person (not including the US$22 train fare), guests are dropped off at the train in Corozal, picked up in Colón  at the end of the ride, taken to Portobelo  and Fuerte San Lorenzo , and then driven back to Dos Palmitos. (Presumably guests can request a side trip to visit Gatún Locks , which they should definitely do.) That’s a good price for a very full day.
Dos Palmitos is across the street from a large wooden church, Iglesia Plenitud de Cristo; heading towards downtown Panama City , it’s the first left after the church, but contact the B&B for detailed directions, as this area is not well known by taxi drivers and there are no good current maps.
The well-established and very popular La Estancia (Casa 35, Calle Amelia Denis de Icaza, tel. 314-1581 or 314-1604, www.bedandbreakfastpanama.com , starts at US$82.50 s/d, including continental breakfast) is a 12-room bed-and-breakfast in Quarry Heights, the former headquarters of the U.S. Southern Command, on the side of Cerro Ancón .
Rooms at La Estanciahave air-conditioning, telephones, and private bathrooms. Three have their bathrooms down the hall but come with a balcony and hammock to make up for that slight inconvenience. Most rooms have a queen-size bed. There’s a common area for guests to relax in, and free wireless Internet. The place is surrounded by trees, and there’s a partial view of the Panama Canal  and the Bridge of the Americas from some of the balconies. Two of the rooms are actually fair-sized apartments with sitting rooms, kitchenettes, and a small patio. These go for US$109 a night, including breakfast. Guests can use the washer and dryer.
The building was once used as apartments for military personnel and thus is a bit stark and utilitarian, but the owners have made attempts to soften the place and make it cheerful. The owners can arrange tours through their own tour company, Panoramic Panama. To get to La Estancia, take the first left up the hill after passing the guardhouse at the entrance to Quarry Heights. The bed-and-breakfast is 400 meters past the guardhouse. It’s house number 35, a peach-colored, three-story building on the right.
Albrook Inn (14 Calle Hazelhurst, tel. 315-1789 or 315-1975, www.albrookinn.com , starts at US$99 s/d, including continental breakfast) is a two-story, 30-unit hotel opened in 2003 in a peaceful middle-class suburban neighborhood next to what had been the Albrook Officers’ Club back when Albrook was a U.S. Air Force base. The standard rooms are small and simple with very firm beds, air-conditioning, and cable TV. Larger “junior suites” with a sitting room and sink start at US$110 s/d. There’s a restaurant/bar in a backyard rancho (thatched-roof hut), a pool with hot tub, and both laundry service and a self-service washer and dryer. This is a good place if you can find a room with beds that aren’t slabs of rock; try several.
Opened in 2008, the Balboa Inn (2311a Calle Las Cruce. Balboa, tel. 314-1520, www.thebalboainn.com , $80 s, $90 d, including breakfast) is in what had once been a house for Panama Canal  employees in the old Canal Zone days. The area is still a quiet residential neighborhood where you can hear the sounds of chirping birds in the surrounding trees rather than squealing traffic and construction. Security includes a locked gate in the front. Since the inn is near the base of Cerro Ancón , the occasional cute little ñeque shows up in the backyard, which really takes me back—I grew up near here, and we always had a family of ñeques in our backyard, plus the occasional deer. Nostalgic flashback aside, this is a good option for those who are happy to be somewhere in-between both the canal and the city.
It has nine rooms, all with private bath, TV/DVDs, safes, free Wi-Fi, and air-conditioning. Rooms are simple with rather thin mattresses, but each has been decorated with cheerful nature murals, which softens the appearance of the house a bit (old Canal Zone housing tended toward the utilitarian). A couple of the rooms upstairs have windows on two sides that let in lots of light. The friendly and competent staff can help arrange tours and give restaurant advice. Guests are welcome to use the kitchen. Rates drop US$5 after the first night. English, Spanish, and German is spoken here. The Balboa Inn is not easy to find if you don’t know the area, and most taxi drivers don’t, but there are very thorough, illustrated directions on the inn’s website. This is a good find.