Hotels are Looking to Improve their finances

As a result of the sanitary crisis caused by the covid-19 outbreak, hotel occupancy in Panama has fallen to historic levels and business income has gone up in smoke, a situation that is forcing hotels to look for options to renegotiate their debts.

Thursday, March 11, 2021

It is estimated that in this context of economic crisis, Panamanian hotels owe $630 million to financial institutions. Given the unpromising outlook, businessmen of the sector have suggested to the government to support the reactivation of the tourist activity.

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Armando Rodriguez, president of the Panamanian Association of Hotels (Apatel), told Laestrella.com.pa that "... in October 2020 32% of the hotels opened and by December another 36% should have started operations and the rest in the first quarter of the year. But because of the closure decreed by the health authorities in December last year, only 36% of the hotels of our membership are open with a capacity of 30% at this moment. The rest will not open until there are optimal conditions."

In August 2020 a dialogue table was held between the authorities and representatives of the hoteliers, in that process the businessmen recommended to work on incentivizing the banks so that they can renegotiate the debt of the tourism companies, however, after almost seven months of having presented it, they still have not received a response from the government.

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Ivan Eskildsen, minister of the Panama Tourism Authority (ATP), assures that "... a $300 million program is underway with the Inter-American Development Bank and the Ministry of Economy and Finance that seeks to facilitate guarantees for loans in order to restructure the debt of tourism companies registered with the ATP, which may be hotels, travel agencies, tour operators and the category of others, in which companies dedicated to the industry qualify. It is expected that between March and April the Cabinet Council will approve the project so that government funds will be provided as guarantee. The hotels are the ones that owe the biggest slice of the cake".

There are businessmen who believe that it is not only a matter of re-adjusting the debts. Anneth Cardenas, a local hotelier, pointed out that it is necessary "... that the industry of events and conventions be opened, otherwise we will not be able to compete with other destinations. Panama does not register in international tourism, while, for example, in cities like Miami, United States, vaccine tourism has full restaurants and hotels'."

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