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What to See
Wow. My first thought was that this must be what the Galapagos are like. The island is literally crawling with critters. Walk to the other side of the island and you'll see birds nesting and, with luck, whales. The water is clear and good for snorkeling. Camping on the island is possible and costs $5/tent. Bring water and food--there is no restaurant--and, of course, insect repellent. To get there, take a taxi to Playa Arenal ($2.40) from Pedasi. The RT ferry to the island costs $60, so try to arrive at the beach early (before 9am) to go with a group. We paid $10 pp, but the boats can fit up to 7 people. The park also charges a $10 entrance fee.
Where to Stay
Probably the cheapest option in town is the Residencial Moscoso on Avendia Central. For $15 pp, you get a room with AC and shared bath. Without AC, it's $10. Since there are limited budget options in town, I would recommend calling ahead at 995-2203. Another option is a homestay ($12.50 pp with private bath, no AC) with a family on Moscoso Street just a block off Avenida Central. Inquire with Marila at Hostal Dona Maria. The rooms share a common area with the house though you enter from the back. The lady of the house will also want to know your comings and goings, so it is not like a ho(s)tel.
What to Eat
While in Pedasi, we ate at several restaurants but were only impressed with one, Restaurante Isla Iguana, near the Casita Magarita Hotel on Avenida Central. We had fried snapper, which was awesome. The coconut rice was moist and the fish was huge. Other restaurants we tried included Pasta y Vino. Even though the owner is Italian, the food was not that great; the pasta was chewy and the selection was slim. La Dulceria Yelly was also a disappointment, although it didn't cost much to figure this out. The coffee was stale and the cakes (50 cents/slice) were dry. And then there is El Patio, a Spanish restaurant that serves paella and steak. The food was ok but pricey.
From Santiago, you'll have to change buses 2 times, at Chitre and then Las Tablas. Take the following buses: Santiago-Chitre (1.5 hr, $3), Chitre-Las Tablas (1 hr, $1.50), Las Tablas-Pedasi (45 mins, $2.40). If you're coming from Santa Catalina, tack on another 2 hours.
Although Pedasi serves as a great base for surfing, snorkeling, fishing, wildlife-watching, etc., the town itself is not much of a draw. Although touted in guidebooks as a "quaint and charming town I hesitate to tell others about," I thought it was pretty much a retirement community--maybe something like Tampa--with flowers and over-priced restaurants. I thought I was coming to visit an undiscovered location but, actually, the wealthy are already building their million dollar homes nearby. Pedasi is also building a world-class hospital to attract medical tourists. Would be curious to hear others' reactions.
Marila, Dona Maria's daughter, runs the Hostal Dona Maria on Avenida Central. She speaks perfect English and was extremely helpful during our stay in Pedasi. If you want general information about what to do or where to stay in Pedasi, seek her out. Even though we didn't stay at her place, she helped us negotiate a boat taxi to Isla Iguana and was an angel.