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Hotel Occupancy in Panama City Falls Below 45%

Hotel Occupancy in Panama City Falls Below 45%

Hotel occupancy in Panama City fell to 44.69% in December last year, according to preliminary data from Panama’s comptroller released last week. The Panamanian government and hotels have blamed informal lodging, including Airbnb, for the downward trend that began in 2015.

Panama City’s hotel occupancy has not recovered since February 2015 when it reached a high of 59.33 percent, or 6,183 rooms out of 10,422 available rooms.

The Panama Tourism Authority (La Autoridad de Turismo de Panama) has blamed the downward trend on Airbnb, Corporate Stays as well as on couch-surfing websites that operate outside government-established models.

In a press release, the tourism authority said on July 19, 2016:

Underground lodging affects the security of tourists who enter the country [and] is at the center of tax evasion and becomes unfair competition for those businesses that operate legally in the country.

It also announced a crackdown on owners and renters that sell rooms to tourists and vowed to levy a fine between $5,000 and $50,000 for violating a law that prohibits apartments and homes from offering lodging services for stays of less than 45 days.

Three days later, the ATP said it visited four apartments in Panama City and fined the owners for “illegally renting or subletting’ the residences. It was unclear whether the crackdown in the capital helped improve the hotel occupancy rate.


Marketing Panama

In November, the tourism authority formally awarded a two-year, $20 million contract to VML, an agency based in Kansas City, Mo., to promote Panama in the United States and Europe.

In a recent survey of tourists leaving the country, more than 70 percent rated their stay as excellent, and nine out of 10 said they’d recommend Panama to their friends and family, La Prensa reported last week. They survey is part of the tourism authority’s efforts to gauge the perception of visitors to Panama is being conducted at airport boarding gates by Ipsos Loyalty.

Despite the overwhelmingly positive impression of Panama, 17 percent of the visitors said their experience was negative due to the amount of trash on the streets and the treatment and customer service they received during their stay.

In an op-ed published Friday, business and tourism consultant Arline Francis Kuhn laments that Panama continues to face old challenges that have yet to be solved by the government. A group of German investors recently told Ms. Kuhn that they enjoyed the ‘atmosphere of security’ in Panama and noted the stability of Panama’s dollar-pegged economy.

Yet, according to Ms. Kuhn, two things stood out in the minds of the German visitors: the level of customer service and the level of English fluency.

“The people of Panama are nice, but that is not reflected in the quality of [customer] service,” Ms. Kuhn quoted them as saying. She called the situation an “open secret” that requires educating those who deal directly with tourists. The perplexed Germans also asked her “how it is possible that attorneys and bankers don’t master the English language when Panama has a service-based economy. The potential investors noted that both observations pointed to severe deficiencies in public education, Ms. Kuhn wrote.

For 2017, still, direct and indirect contributions of travel and tourism to the GDP and employment are expected to grow, according to the latest forecast by the World Travel & Tourism Council. Direct contribution to the GDP totaled $3.7 billion in 2016 and is expected to grow by 9.1 percent this year.

Travel and tourism supported direct employment of 131,000 people in 2016, and that, too, is expected to grow by 5.3 percent in 2017.