The best cheap lodging in Panama City, Panama is Luna's Castle Hostel. The dorm beds cost only $12 per person and the private rooms cost only $28 per night. They both include free breakfast, free internet, free movies in the movie theater. They also have a lot of good Panama travel information including transportaion to San Blas, and Sailing to Colombia. If you want to make a reservation, visit their website at www.lunascastlehostel.com