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Bocas del Toro, Panama

WHY NOW Leaping dolphins replace Santa's reindeer; white-sand beaches provide the seasonal backdrop; and a costumed holiday parade ushers in the festivities at Bocas del Toro, the main city in the archipelago of the same name, off the northwest coast of Panama. Its culture has a Caribbean flavor, a result of longtime immigration from Jamaica. And although Spanish is the official language, many islanders are fluent in English.

WHERE TO STAY The six solar-powered bungalows suspended over Almirante Bay at Punta Caracol Acqua-Lodge (011-507/612-1088; www.puntacaracol.com.pa; doubles from $325) are only a 15-minute water-taxi ride from Bocas del Toro. Bungalows have terraces that give guests private access to a coral reef teeming with parrot fish, snapper, and other tropical marine life.

CHRISTMAS DINNER The hotel's thatched-roof, open-air Restaurant Punta Caracol (dinner for two $50) also sits on stilts over the water. A live Latin band strikes an upbeat note while guests sip champagne and enjoy a traditional Christmas dinner of turkey with almonds, hazelnuts, and raisins and oven-smoked ham topped with pineapple. On New Year's Eve, the owner, José-Luis Bordas, arranges an illuminating fireworks show from boats anchored offshore.

NATURAL ATTRACTION Bordas will gladly set up a boat trip to the pristine (and protected) Isla Bastimentos National Marine Park (011-507/315-0855; park entrance fee $10), about 30 minutes southeast of the ecolodge. Here, hike through the mangrove forests, check out the famous ranas rojas (tiny native red frogs) at the aptly named Red Frog Beach, and dive offshore to see more than 200 species of fish—and, if you're lucky, a nesting sea turtle.

SANTA WHO? January 6 is the festival of Los Tres Reyes Magos (the three wise kings). On the night of the fifth, join Panamanian children by placing your shoes on the windowsill so the Magi can fill them with presents as they pass by during the wee hours.

STOCKING STUFFERS Super Gourmet La Boca Loca (Main St.; 011-507/757-9357) carries treats from the Caribbean Chocolate Co., which specializes in rich, dark varieties that are handmade from Bocas-grown organic cacao (an indigenous crop) using centuries-old fermenting and roasting methods. Stop by Artesanias Bribri (Main St.; 011-507/757-9652) to pick up molas—Panama's famously colorful handmade fabrics, traditionally worn by local Kuna Indian women. —Bonnie Tsui