If you're booking a holiday to Guatemala, it's pretty much a given that you'll include Lake Atitlan in your itinerary. It's natural beauty and colorful Mayan culture make it a must for most travelers, yet most guide books refer to it as one place, which it is not. It's a number of small villages set around a large lake, and deciding where to stay is really difficult! We ended up staying in two different towns in 4 days on the lake, and visited more by boat during the short trip - so here's my summary of the top places to stay.
Panajachel - the place most people arrive into when going to Lake Atitlan. The largest of all the towns and the liveliest in terms of markets, bars, restaurants and nightlife. Many Gutemalan's will say that "Pana" (as everyone refers to it) has been ruined by years of tourism but its got a great buzz to it. It's also the most convenient as dozens of shuttles go to and from Antigua and Guatemala to Pana each day, and all of the boats to the other different towns depart from here. Accommodation wise, there's something to suit every budget. If you're counting pennies, Blue Mayan is a great B&B and there’s other fabulous lakeside pads to be found on Airbnb at a variety of prices. If you want to splash out, stay at the Hotel Atitlan. Set in stunning botanical gardens, all of the rooms face the lake (although you want to ask for one on the second floor for the best views.) The pool and hot tub are an amazing place to sit back, relax and watch the non-stop boat traffic on the water go by. The restaurant serves the best food we ate in Guatemala so even if you can’t stay there, make sure you stop in for lunch. You wouldn't want to eat there every night though - don't miss the pizza and live music at the Circus Bar (be prepared to queue - it's worth it!) or try Chez Alex for some finer fare.
Santa Cruz is a great option (and probably my favorite) if you don’t want to be in Pana itself, but you want to be within an easy and regular boat ride away. Set into the side of a mountain, the funky but tiny town has 2 fabulous and very affordable hotels, La Iguana, and Hotel Isla Verde. Not much to do here at night apart from eat and hang out at the hotel bars but there's a lovely vibe to the place with many travelers and divers (yes you can dive in the lake) chilling out here. During the day you can wander over to Jabilito, the village next door. An easily accessible and safe (uncommon in Guatemala) path (ask anyone to show you where it starts) takes you high up onto the side of the mountain offering a jaw dropping perspective across the whole lake for the duration of the 45 minute journey.
Santiago is over on the opposite side of the lake to Pana. A 15-35 minute boat ride away (depending on how choppy the water is, and how new or old the boat!) this large town is famous for it’s huge market which spills down from the main road into the port, and the mysterious Maximon. You’ll feel a bit more like you’re in the “real” Guatemala here and Pousada de Santiago, run by an eccentric American has fabulous little cottages on the lakeshore with lovely places to sit, chill and watch the sunset. It’s a tuk tuk ride from town and there’s not much to do in the evenings other than eat at the on-site restaurant (which does serve delicious food) and play cards, read and sleep. But if it’s relaxation you’re looking for, this is the place to do it.
Finally, the famous San Pedro. Backpackers flock here like moths to a flame for the parties and language schools. In my humble opinion it’s a bit of a dump – a fun place to come for a beer, even a bite to eat and undoubtably a big night out but it wouldn't be my top choice of places to stay. However, whilst it’s not my cup of tea it clearly is many other people’s and of all the places we passed and heard reports of, the Pinochio Hostel seemed to be the best sleeping option. Basic but clean and friendly seemed to be the general vibe which in a hostel is really all that’s required!
Overall I’d say go for Pana or Santa Cruz- but wherever you end up in Lake Atitlan, enjoy!