Is Panama City The Next South Beach?

Panama City's Casco Viejo neighborhood has been revitalized after falling into disrepair in the 1950s. (By Keating Holland)

"No, I'm sorry," she tells my fiance, Manuel, and me. "I do not have a reservation for you."

After arriving late at night in a foreign city where we do not know a soul, this is not the greeting we want to hear, especially because the lobby of this boutique hotel hints at a pleasant stay -- Persian rugs, plush sofas, soft lighting and newspapers on every table.

"It's not a problem," the woman chirps before I can pull out our confirmation slip. "I can take care of you."

It is a scene that will be repeated over and over in Panama -- a glitch followed by an enthusiastic fix. Our room, with 20-foot-high ceilings and exposed wood beams, has all the modern amenities of a five-star hotel, except it's larger and much more affordable. There's a desk with Internet access, piles of feather pillows and soft robes for us both.

We head back downstairs to the hotel's groovy new Ten Bistro, where the gimmick is $10 entrees. (Yes, Panama's currency is the U.S. dollar, so dinner is a bargain.) After two flights, bad directions and a missing reservation, a decent meal and big goblet of wine are just what we need.

But there's a problem: The restaurant is closing at the very un-Miami hour of 10 p.m.

This being Panama, the problem evaporates as fast as it appeared. The manager stays open just for us, guiding us to a table aglow with orange candles. The soothing palette continues overhead, with glorious bird of paradise blooms sprouting out of suspended glass vases. And to top it off: a chilled bottle of a crisp, absurdly inexpensive Chilean sauvignon blanc.

The Canal, of Course

---

Even today, 93 years after completion, the Panama Canal is an awesome engineering feat, guiding ships the 50 miles from the Caribbean Sea to the Pacific Ocean.

We arrive at the Miraflores Locks and head to the outdoor viewing deck. The sight of 965-foot-long behemoths squeezing through the canal is unbelievable, the precision timing of the locks a marvel. Over a loudspeaker, a bilingual guide rattles off canal stats and fun facts. "The lowest fee ever assessed for passage was 36 cents," he says. "It was for Richard Halliburton to swim the canal." An impressive museum inside is complete with a simulator that gives a realistic sense of what captains experience as they navigate the narrow locks.

The next day, while Manuel works, I ask my cabdriver to drop me at the Plaza de la Independencia in the center of Casco Viejo. The modest square looks much as it did 100 years ago: narrow one-way streets, stone edifices and a few rusty cannons.

On the corner is a lovingly restored four-story colonial built by the French in the 1870s and now home to another canal museum. At one-fifth the price and almost empty, it is a much better deal than the locks museum.

The story of the canal -- from the failed effort by the French in the 1880s to current widening plans -- is presented in bright, colorful interactive exhibits. There's a full recounting of the 22,000 workers who died, most by malaria or yellow fever, and a sobering account of the segregated system that left dark-skinned workers with less money in their pockets at the end of each workday.