This Central American Country Is An Affordable Maldives Alternative With Dreamy Over-The-Water Resorts

Over-the-water bungalows have long been considered hallmarks of a luxurious, ultra-exclusive travel experience. Unfathomably gorgeous locations like the Maldives and Bora Bora have held the crown for these opulent vacations, but savvy travelers seeking these dream-worthy experiences without the associated hefty price tag are expanding their worldview, only to discover dazzling alternatives in unexpected places. 

In addition to being 2025's best place to retire abroad, one Central American country has quietly become a leading contender for this otherworldly type of getaway: Panamá. Most known for its famous canal, extreme biodiversity, and high-quality coffee, it's also overflowing with more than 1,800 miles of coastline. Replete with secluded islands and pristine beaches, Panamá is also one of the most affordable tropical vacation destinations in the world.

Located in northern Panamá, just off the eastern coast of the Bocas del Toro Province and a 45-minute flight from Panamá City, the nine islands of the Bocas del Toro Archipelago are home to dozens of over-the-water bungalow stays. Rivaling even those considered the most luxurious in the world, like the Intercontinental in Bora Bora and the Hideaway Resort & Spa in the Maldives, Panamá's resorts on the Caribbean coast range from more-than-affordable to over-the-top and all-inclusive, and offer rejuvenating getaways for every budget.

The popular province of Bocas del Toro boasts overwater bungalows of every kind, ranging from standard hotels and bargain hostels, to quaint B&Bs and luxe all-inclusive resorts in a range in prices. Starting at around $30 per night (and going up to over $1,000), the overwater bungalows of Bocas del Toro offer something for everyone, especially the budget traveler. With its pristine white sand beaches, azure waters, lush hikes and world-class snorkeling, Bocas del Toro offers budget travelers a dreamy Caribbean Sea vacation.

Located on Isla Solarte in Bocas del Toro is the affordable, but still luxurious, Sol Bungalows. This boutique bed and breakfast is the #1 rated overwater bungalow property in the country, and has been a TripAdvisor Traveler's Choice award winner for the past three years. The property operates completely off-grid, utilizing solar power and rainwater, with the on-property restaurant being supplied by local farms and suppliers. The property's small size of only four bungalows allows the staff to give each guest individual attention and a specially curated experience. Starting at around $328 per night with breakfast, the property offers massages, private boats, and snorkeling excursions, making Sol Bungalows an amazing way to fully customize a one-of-a-kind luxury vacation without breaking the bank.

For an even more affordable option, Punta Caracol Acqua-Lodge on Colon Island has overwater bungalows starting at just $140 per night. Each bungalow comes equipped with a hammock, kayak, access to public wifi, snorkeling equipment, and rainy weather gear. Also focused on operating sustainably, Punta Caracol is an affordable option for visitors who value immersive, one-of-a-kind experiences with minimal environmental impact.

If you choose to tear yourself away from your overwater Bocas del Toro bungalow, spend time enjoying all the archipelago has to offer. With water taxis serving the area, it's relatively easy to hop between the islands and islets of the region. With Panamá offering jaw-dropping perks and discounts to expats and retirees, there are countless reasons to visit and explore as much as possible.

Isla Bastimentos, the largest island of the archipelago, is a surfing Mecca for advanced and experienced surfers, home to Bastimentos National Marine Park, and remains relatively untouched by human hands. Nearby Isla Carenero can be explored on foot in approximately an hour, and is replete with bars, restaurants, and breaking waves perfect for swimmers and surfers of all experience levels.

Isla Colon is the most developed of the archipelago, it has a small international airport, and offers several opportunities to participate in outdoor and water activities. Home to Bocas Town, with its many restaurants, bars, and a thriving nightlife, the island is a one-stop shop for all things food and entertainment. While there, grab a bite at the highly-rated Coco Fastronomy, or El Ultimo Refugio, serving authentic Caribbean and seafood dishes with vegan and vegetarian options. For a more unique experience, check out Meren Pool Club at Tropical Suites Hotel. Combining a swim-up bar, high-end menu offerings, and an all-day happy hour, it's a great way to wrap up your Bocas del Toro vacay.