Somoto

From Managua, head to Mercado Mayoreo and take any Estelí-bound bus. Once in Estelí, go to Cotran Norte (a short walk north of Cortan Sur, where your bus may have arrived), and take any bus to Somoto. These leave hourly. Alternatively, direct buses leave from Managua (Mercado Mayoreo) to Somoto less frequently.
From Choluteca (Honduras), take any bus to San Marco de Colón, take any frontera-bound bus, then transfer to any Somoto bus once you cross the border.
Coming from Managua, you'll end up in Somoto's bus station. To get to the centre, cross the highway and walk four blocks south. The central park will be one block to the right, next to the church. At night, you may want to hop in a taxi.

Somoto is a small city, and most destinations can be reached on foot. A taxi (C$20 per person) can be used for outlying destinations that aren't accessible by bus.

The Mirador (lookout point) on a hill on the northeast side of town offers a great panorama of the mountains that rise 300m above the town. The cost is C$10 per person, in addition to C$20 per person cab fare.

The Cañón de Somoto is the big tourist draw.
The canyon is 200m deep, with sheer 100m cliffs falling straight to the water. At some points, it is only a few meters wide. The canyon is dramatic and beautiful with rock formations and wildlife.
The canyon can be explored with a guide or alone. In either case, make sure to bring sandals with you (or rent them at the parking lot just before reaching the river,) as the stones on the bottom of the river can hurt your feet. Be aware that at the height of the rainy season (September/October), the trip may be impossible due to the current.
Exploring the Canyon Without a Guide
Typically, guidebooks describe the process for getting to the bottom of the canyon. Taking the bus to the border (El Espino) from Somoto, tell the driver you want to go to the Canyon and keep a lookout for a sign. You will be dropped off at the top of a road. After a short walk down a dirt road, you will come to a gatehouse where you will be asked to pay a fee (C$57.) Continue down the road for about 10 minutes until you reach the river. Cross the river and continue down the road. Follow the road upriver until you reach a place with some boats parked. This is the bottom of the canyon.
Once you reach the boats, look for someone to pay to take you upriver a ways (C$25 to C$50 depending on far up they take you.) You can be taken as far as the boat goes, at which point you will come to a place with some inner tubes. You can swim as far upsteam as possible from this point, exploring the bottom portion of the canyon. Be careful, especially if you don't have any lifejackets. Certain portions of the canyon are deep, and distances can be far for people not used to swimming. Be aware that you will be swimming most of the way; walking on the side of the river is rarely an option. As you get further upstream in the canyon, the obstacles you have to climb will get more and more difficult. After you've had your fill, turn around and go back to the bottom.
Exploring the Canyon With a Guide
Hiring a guide will give you a somewhat different experience of the canyon. Although certain guides could simply accompany you on a trip similar to the one described above, others will take you on a more thorough trip. This trip involves using another entrance to the park further upstream, then going downstream through the entire length of the canyon.
It is not advisable to attempt this trip alone. It is difficult to find the top of the river where the trip starts, and the guide must sit on an inner tube keeping your possessions out of the water.
Before buying any guide's services, make sure of all of the following:

• Your trip will be through the entire canyon instead of starting at the bottom
• Life jackets are included
• An inner tube will be provided to keep your possessions dry

Transportation To and From the Canyon
The canyon can be reached by taxi or by chicken bus. The chicken bus costs C$6 each way, and the taxi is about 10 times as much. Normally, transportation is not included with the fee for a guide; in fact, you need to pay for your guide's transportation as well.

The Mercado Municipal de Somoto is the main shopping center. It is a very clean market, but is geared more towards locals than tourists. The Hotel Panamericano has tourist items for sale.

The Hotel Panamericano has a restaurant, and there is another expensive joint ($7+) on the main drag across from Hotel Colonial. There are a few pizza carts next to the Parque Central.
Comedor Familiar, a great comedor serving breakfast, lunch, and dinner, as well as drinks at night, is located just south of the Hotel Colonial, a half block off of the main street on the left. Full breakfasts run C$50.
On the northeast corner of the market, a clean bakery serves handmade treats on the cheap. For C$5, you can get a beautiful cupcake or an animal-shaped treat. Across the street is another comedor.
Rosquillas are a local specialty, they come in different shapes and sizes (usually round, like onion rings) and they are generally are made from corn, cheese, and herbs, with a few popular versions sweetened by cinnamon and molasses.
On the road from the main road to the entrance of Somoto Canyon there are several small restaurants.

Not much of a nightlife in this small town, but the backroom of Comedor Familiar is sure to have some locals sharing 1L beers (40c or $2).

In the town of Somoto

There are lots of hotels, hospedajes, and one hostel in town. Most are along the Panamericana and between the bus station and the center. Prices range from C$100 to $25 per person.

• The Hotel Panamericano is located on the north side of the Parque Central, with a pretty garden, restaurant, and store. For $10 per person payable on check-in, you get a room with fan, private bathroom, TV, and refrigerator. Unfortunately, some rooms are dungeonlike and lack furniture, and bathrooms can be bleak. Ask the staff to show you several rooms. In addition, the staff might seem a bit relentless trying to get you to do a tour or eat in the restaurant. They arrange tours for guests and non-guests alike.
• Another option is the Hotel Colonial, a more upscale hotel. This hotel costs $25 per room for two people, and includes a good tipico breakfast. Although the amenities are almost exactly the same as the Panamericano (except for lacking the refrigerator), the rooms are more pleasant and comfortable, with nice furniture and set around a pretty courtyard. The foyer and lounge have a formality that would befit a nice property in Granada or Leon. The cheerful staff can set up tours for guests. Located just south of the central park on the main road.

• Namancambre hostel

  phone: +505 27220889
  Useful for backpackers. Free Wi-Fi and included kitchen, and they also have a tour agency that offers guided tours around the canyon, adventure tourism and can set people up to volunteer at a few sites.

At Somoto Canyon

There is plenty of (basic) accommodation close to the entrance of the canyon. The families living there often rent out a room or a cabaña for C$50 to C$150 per night.
You can also camp at the canyon (free, except for the C$58 entrance fee for the park that you need to pay anyway.) There is an information point when entering the canyon. The rangers there can point out the best camping spots, either down by the river or up on one of the viewpoints. The family which runs the parking lot just before you get to the river also lets people pitch a tent on their grounds.