The region used to be a political minefield, now it’s turning into a hot hotel market.}
During the 1970s in the US, turning over the Panama Canal was a highly controversial issue. But today, with a $5.25 billion canal expansion, Panama is known for its thriving tourism market despite an international economic meltdown.“Panama’s visitors numbers are growing at a much higher rate than its supply of hotel beds,” writes Ronan McMahon in International Living, who adds hoteliers were seeing occupancy rates higher than last year’s record numbers.He says there is no shortage of projects in the pipeline. The Panamanian Institute of Tourism (PAT) last year approved 40 hotel projects; they are currently reviewing 18 other applications.“There are about 10,000 hotel beds in the pipeline,” says PAT.While the rest of the world is often seeing lower occupancy rates and a decline in building new hotels, Panama is thriving. With visitors growing at anticipated rates, McMahon estimates it will take five years to catch up on the growing demand for hotel rooms.Over the past five years, 35 new hotels and resorts have been built here. Some of these include the world’s largest chains including Sheraton, Marriott, Radisson and Inter-Continental, according to tourism officials.They say tourism was up in 13.1 percent in 2008 from the previous year, according to the Panama Ministry of Tourism. “Even with the downturn of the global economy, it appears as though Panama is one of the strongest destinations for tourism in the Americas,” says the tourism board.It cites among reasons: the country’s political stability, stable banking laws, warm climate (300 days of sunshine), one of the lowest crime rates in Latin America and a relatively low cost of living.Both cruises and airline flights have also dramatically grown in Panama. KLM increased the frequency of its flights from Amsterdam to Panama City from three to five flights a week. Iberia has also announced it was increasing flights from Madrid.
McMahon says much of the new market is upscale with nightly room nights above $200. “There is a growing niche in the market for mid-range hotels,” he says.Among developers looking at higher end projects is Maxime Navarre, CEO of Grupo Viveros, whose company is well underway with a $300 million island development on an island just outside of Panama. “He is banking on the fact that Panama is the world’s next hot spot,” says Stephanie Lund, of 5W Public Relations which promotes the property.“We decided to build our resort and development off the coast of Panama City because it would give our guests access to all that Panama has to offer -- just a short plane or boat trip away,” says Navarre.“The Pearl islands have the most stunning beaches you can experience and Panama is this incredibly vibrant metropolis with luxury shopping, gourmet restaurants and beautiful architecture,” he adds.The development has 12 miles of beachfront and 20 miles of coastline. His $300 million development includes a 140-room boutique hotel (due to open next year) and a 250-room hotel on the Jack Nicklaus Signature Golf Course. The resort in the Pearl Islands will also have a 300-slip marina and yacht club, upscale dining, shopping and spa facilities.
Navarre says an aggressive US advertising campaign emphasizing Panama’s rich ecosystem, sparkling cities and thriving tourism sector is being aired in major markets such as New York City and Los Angeles.The development is 50 miles off the coast of Panama City but only a 15-minutes ride from the airport. “We have almost the same climate as Costa Rica and we have more beaches. It’s also a safe country,” Navarre says of the area, which he expects to compete with Costa Rica in the future.Navarre maintains that despite Costa Rica’s head start as an eco-friendly country to tourists, that country has not developed its road system as extensively as Panama’s. He expects to draw increasing business from Costa Rica in the future.“Where else can you surf in both oceans, or see Atlantic and Pacific marine life in the same day?” asks Reuben Blades, the part-time actor who is now Panama’s Minister of Tourism. Another major reason for the attraction is its location as a hub accessible from anywhere in the world.“Panama is a hub, so with greater air traffic, we’re expecting visitors to come here from everywhere in the world,” Navarre says.Navarre says Panama was virtually undiscovered until about six years ago when such developments as his own began to be announced.“Panama was a sleeping giant for many years,” he says.In the past, the Pearl Islands were famous for one of its residents: the Shah of Iran, who fled here in 1979. The islands have now become a weekend playground for local urbanites with yachts a popular scene in the islands.Navarre says all his hotel rooms will have ocean views. Room prices at his hotel will start at about $800 a night.Lloyd’s List in a recent report suggested public officials in Panama have talked about it becoming the next Singapore or Hong Kong.“This vision depicts Panama as a land punctuated by state-of-the-art ports, excellent highways and infrastructure,” says the report.The area’s location next to the US also gives it advantages over Asia, the report says.“One might expect the US banking crisis to send a shiver through Panama, until recently a virtual fiefdom of its northern neighbor,” writes The Banker. “Instead, it is full of optimism as it positions itself as the heart of Central America and more ambitiously, as a Singapore-style port,” the report says.Media reports about Panama say the area is highly attractive in large part because of its 300 sunny days a year, low prices and other lures. But there are pockets of poverty amidst the new wealth. More than one third of the country’s residents live below the poverty line.The expansion of the canal -- which will double its capacity -- is helping to lure not only workers but tourists who have become aware of the area, tourism officials say. One problem created by the expansion is a growing shortage of skilled port workers.
