Where to Stay in Oaxaca (Best Neighborhoods & Places, 2023)

7 Best Neighborhoods & Areas to Stay in Oaxaca

Oaxaca is the fifth largest state in Mexico at 36,820 square miles and inhabits both tropical and subtropical climates. The bulk of accommodation options in Oaxaca are concentrated in the downtown area of Oaxaca City, also referred to as the Zocalo or city center. 

Smaller neighborhoods, or barrios, surround the major city, including beach cities and small pueblos in the countryside. 

Oaxaca City Center

👉 Best Area For Entertainment | ✨ Best Oaxaca City Center Hotels: Iguana Hostel • Ticuchi Hostel • Grand Fiesta Americana Oaxaca • La Catrina de Alcala

You won’t run out of fun things to do while staying in Oaxaca’s central area. From art galleries to vibrant local culture, coffee shops, traditional Oaxacan cuisine, and colorful colonial architecture, downtown Oaxaca has it all.

You can take your pick between cheap backpackers hostels, whole rental apartments, luxury hotels, or mid-range hotels, most of which are just a short walk from the Zocalo.

I recommend staying in Central Oaxaca if you want to be close to the main city attractions, food tours, and the hustle and bustle of this colorful Mexican state.

You will also find an abundance of live music in downtown Oaxaca and have plenty of opportunities for dancing. If you haven’t yet mastered the 3 main steps of salsa, you’re likely to pick it up quickly in Oaxaca Centro.

Pros of Staying in Oaxaca City Center Neighborhood:

• Close to the main city attractions
• Many restaurants and bars in the area
• A chance to meet friendly locals and fellow backpackers
• Many tours leave from Oaxaca Centro

Cons of Staying in Oaxaca City Center Neighborhood:

• It can be noisy at night
• There can be both foot and automotive traffic
• Oaxaca accommodation can fill up on the weekends

Puerto Escondido

👉 Best Area For Beaches | ✨ Best Puerto Escondido Hotels: Casona Puerto Dreams • Night of the Iguana • Hostal Akumal La Punta

After exploring the cultural capital of the state, Oaxaca city center, head to the coast to experience the hot Mexican sun in Puerto Escondido. 

You most likely have to fly into or drive from downtown Oaxaca to get to this beach town, so I suggest staying a night in the city before hitting the party beach town.

Many places to stay in Puerto Escondido are situated right on the beach, with many of the best spots to surf within easy walking distance. The beaches of Puerto Escondido are comparable to the top beaches in Tulum, making this a top Mexico beach getaway.

Hotel Arcoiris is right on the Zicatela beach, which showcases some of the best surfing in Oaxaca and features hammocks overlooking the Pacific Ocean. Playa Carrizalillo is one of my favorite beaches in Puerto Escondido and is a short walk from the Escondido center.

Puerto Escondido is the largest Oaxaca beach town, suitable for travelers who like to be close to major amenities while still having access to a small local market with locally sourced seafood and cacao beans.

Pros of Staying in Puerto Escondido Neighborhood:

• Close to the beach
• Fresh seafood
• Friendly locals
• Many surf rental options
• Affordable accommodation options

Cons of Staying in Puerto Escondido Neighborhood:

• Far away from Downtown Oaxaca
• Beaches are far from each other
• Can be extremely hot during the dry months

Barrio de Xochimilco

👉 Best Area For Rich History | ✨ Best Xochimilco Hotels: Hostel Frida Bed & Breakfast • Hotel La Cascada • Casa Xochimilco

Not to be confused with the Xochimilco in Mexico City, this barrio is Oaxaca’s oldest neighborhood, founded in 1486. Barrio de Xochimilco is known for its weaving and textile production and is popular among individuals who appreciate Mexican handicrafts.

This suburb of Oaxaca City feels like its own small village and has mom-and-pop eateries and family-run shops. You can also find street vendors in this area selling tamales and chapulines, or fried grasshoppers. 

Visit García Vigil street, with art that honors the famous Mexican artist, Rufino Tamayo. This is also a popular destination to take a street art or walking tour, among the vibrant rainbow-colored buildings and central plazas lined with traditional agave cacti. 

Pros of Staying in Xochimilco Neighborhood:

• Away from the tourist crowds
• Around vibrant street art and delicious local food
• No traffic 

Cons of Staying in Xochimilco Neighborhood:

• Away from the tourist attractions in the downtown area
• Fewer entertainment options are available
• Less likely to meet fellow backpackers 

Reforma

👉 Best Area For Peace and Quiet | ✨ Best Reforma Hotels: Misión De Los Angeles • Posada de Los Angeles • Beautiful Garden Oaxaca

If you are considering where to stay in Oaxaca for peace and quiet, look no further than the Reforma. This modern residential district is home to malls, trendy restaurants, and the political buildings of the city.

The grand colonial architecture is a major draw to the Colonia Reforma area. While this off-the-beaten-path destination is less visually-spirited than Oaxaca Centro, this middle-class area offers an abundance of convivial restaurants and cafes.

This is the best place to stay in Oaxaca if you want to feel like a local. Eat where the locals eat, drink at the bars they frequent, and lounge around the parks they take their dogs and families to.

While there are a few hostels and hotels in this quiet Oaxacan neighborhood, I recommend staying in a rental property in the Reforma. Many accommodation options here are two-storied and have amazing views of the huge city below.

Pros of Staying in Reforma Neighborhood:

• Quieter at night and on the weekends
• Up-scale restaurants and bars
• Less crowded than the downtown area

Cons of Staying in Reforma Neighborhood:

• Farther away from the hustle and bustle of Oaxaca Centro
• Not as visually pleasing as other Oaxaca neighborhoods
• Fewer tours leave from here

Barrio de la Noria

👉 Best Area For A Local Feel | ✨ Best Noria Hotels: Hotel Hacienda • La Noria Centro Historico • Azul Cielo Hostel

This neighborhood borders the downtown area to the southeast and is one of the quietest neighborhoods in Oaxaca. La Noria residential area showcases colorful homes and local Abuela-style eateries.

It’s only a 10 to 15-minute walk to the Zocalo from the Barrio de la Noria, a great way to work off your morning coffee and pan dulce. If you are considering where to stay in Oaxaca for families, look no further. La Noria is the safest place for families and is extremely budget-friendly. 

Although it’s not too far from the center, I would recommend taking a taxi back to your hotel in La Noria after a night of bar-hopping or salsa dancing instead of walking for 15 minutes.

Pros of Staying in Noria Neighborhood:

• Extremely quiet
• No traffic
• Affordable food and accommodation prices

Cons of Staying in Noria Neighborhood:

• Far away from the main tourist attractions
• Not many entertainment options in the area
• 15 minute walk from the Zocalo

San Jose del Pacifico

👉 Best Area For Fresh Mountain Air | ✨ Best San Jose del Pacifico Hotels: Bostel Rancho Viejo • Cabaña en el Bosque • Rancho Samadhi

Tourists pass by San Jose del Pacifico on their way to Puerto Escondido. This mountain town is only 3 hours outside of Oaxaca Centro and offers an entirely different vibe.

This small mountain town is old-school and many places to stay aren’t available online. Brave travelers arrive on the scene without having any accommodation booked but if this isn’t how you like to travel, I’ve included the top 3 places to stay here.

San Jose del Pacifico is one of the best things to do in Oaxaca for travelers who love crisp mountain air. Stay in a mountain cabana above the clouds in this unique town and swing over the treetops or go on a forest trail and discover natural Oaxaca gems.

San Jose del Pacifico is a lesser-known destination in Mexico, one of the few tourist places that aren’t overcrowded. Experience the tranquility of the Mexican mountain air next time you’re in Oaxaca.

Pros of Staying in San Jose del Pacifico Neighborhood:

• Serene mountain environment
• Not an overcrowded destination
• Local, handmade food is available
• Surrounded by beautiful hiking trails

Cons of Staying in San Jose del Pacifico Neighborhood:

• Far away from Oaxaca City
• Not many tourist activities
• Not many accommodation options to choose from

Teotitlán del Valle

👉 Best Area For A Cultural Experience | ✨ Best Teotitlan del Valle Hotels: Teocalli • Casa de huéspedes “Elim” • Ojo de Luna Teotitlán

Teotitlán de Valle is one of the best things to do in Oaxaca. The beautifully-weaved handicrafts are second to none in the country and the romantic cobblestone streets of this small town incite nostalgia.

This pueblito, or small local town, is in the midst of Mezcal agave growing rancheros only an hour outside of the big city. And of course, tasting Mezcal is one of the best things to do in Mexico. You are almost guaranteed to be among one of very few tourists in Teotitlán del Valle, adding to its enticement.

This is one of the best areas in Oaxaca for photoshoots, backdropped by hundreds of agave plants, colorful handicrafts, and rolling Mexican hills. One of the best parts about staying in this area is that it supports the small community, an area that receives far less help from tourism.

Teotitlán del Valle is one of my favorite spots in Oaxaca and is as safe as safe can be. Meet friendly locals, sip on local coffee, or indulge in some local, handmade ice cream.

Pros of Staying in Teotitlán del Valle Neighborhood:

• Removed from busy downtown crowds
• It’s easier to get to know the local people
• Near delicious, local Mezcal
• Near many hiking trails in the rolling Oaxaca hills

Cons of Staying in Teotitlán del Valle Neighborhood:

• Few entertainment options are available
• Few restaurants and accommodation options are available
• Farther away from major Oaxaca tourist attractions

Tips for Staying in Oaxaca

Read Online Reviews Beforehand

Just because a hotel or hostel has the price you were looking for doesn’t mean it’s top-quality accommodation. Check online reviews before you make your ultimate decision to see what recent travelers are saying about the establishment.

Even if the photos look promising, there may still be some “deal breakers” you would only know about via online reviews. I’ve learned this top Mexico travel tip from unfortunate experiences so you don’t have to.

Make Sure Breakfast is Included

Most hotels and hostels in Oaxaca include breakfast at the nightly rate. If your accommodation doesn’t offer a free breakfast, keep looking because you will likely find a hotel for the same price that offers a complimentary breakfast.

The breakfast will likely be coffee, juice, and bread, but it’s still something to give you the energy to start your long day of sightseeing in Oaxaca.

Stay in an Accommodation Within Walking Distance of the Zocalo

If you decide to stay in Oaxaca Centro, you will want to stay in an accommodation that’s within walking distance of the Zocalo to save money on transportation. 

If tranquility is your main priority while staying in Oaxaca, there are barrios within walking distance of the Zocalo that are still quiet like La Reforma, La Noria, and Barrio de Xochimilco. These neighborhoods are within walking distance of the main downtown area but far enough away to not hear the craziness of the city at night.

Decide Whether You Want to Make Friends or Have a Good Night’s Rest

Staying in a hostel vs a hotel makes a major difference in your travel experience. Staying in a hostel allows you to meet more fellow travelers, be a part of organized communal events, and sometimes even party on the rooftop.

Most times, hotels are more private. While you may still meet a fair share of other travelers, hotels are the best option if you want a more quiet, personal travel experience. Another great option for private accommodation is a rental property like these Oaxaca rentals.

Bring Earplugs

Earplugs are a travel lifesaver. This is especially true if staying in a hostel. Most times, hostels have community events or an on-site bar that can get pretty loud. Many party hostels will provide travelers with earplugs but it’s still a good idea to travel with some just in case.

You will want earplugs if you are also staying in a hotel, especially if you are close to downtown Oaxaca. 

Don’t Skimp on Tours in Oaxaca

It’s worth it to partake in at least one tour while in Oaxaca. Whether that’s a food tour, a tour to Hierve el Agua, or the Monte Alban ruins, a tour is the best way to learn from the locals of the area.

Sign up with your hostel or hotel so you can go with others from your accommodation and make friends easier that way.

Plan for Oaxaca’s Two Seasons

Oaxaca has two seasons: the wet season from May-September and the dry season from October-April. See our guide to when to visit Oaxaca for more details on how to plan for your stay, depending what time of year you’re visiting Oaxaca.

FAQs About Where to Stay in Oaxaca

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Thanks for reading my top guide on where to stay in Oaxaca! Also, check out my hiking in Mexico guide to experience some of the best trails in the country, some of which are in Oaxaca!

Buen viaje!