Panama: Hotels React to Low Occupancy Rates

Solutions are being sought to the lack of promotion of the country and unfair competition from illegal hotels, so that the occupancy rate, which went from 70% in 2011 to 52% in 2015, can be improved.

Monday, March 14, 2016

According to the Office of the Comptroller General of the Republic, the occupancy rate in Panama fell once again last year, going from 56.1% in 2014 to 52.3% in 2015. The average daily number rooms occupied during the last year was 5,466 compared to 5,816 registered the previous year, representing a 6% drop in this indicator.

See also: "Panama Still Not Promoting Tourism"

The situation is causing alarm among hoteliers in the country. Herman Bern, president of Empresas Bern, told Laestrella.com.pa that "... this year some hotels in the country will close. The situation in this sector is critical. There are cases where the profit margin is zero, and the hotel owner has to pay the payroll of workers with money from their personal savings."

"... Meanwhile, Octavio Vallarino, from Marriot Hotels Panama, said that rather than occupancy, they are concerned about the 30% drop in hotel rates, which coupled with the minimum salary wage rise every two years has led to an unsustainable situation in the sector. "

The reasons for the decline in hotel occupancy rates are not new. Both entrepreneurs confirm the lack of international promotion of the country, which is now in its third year, the effect on tourism of the potential spread of the Zika disease, and the proliferation of illegal hotels. Hotel occupancy has fallen by at least 20% in the last five years, according to the Tourism Authority of Panama.

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More on this topic

2016: Bad Year for Panamanian Tourism

May 2017

A decline of 4.6% in the flow of visitors has been attributed by tour operators to the fact that in recent years the country did not have sufficient international promotion.

An article on Prensa.com reports that "according to the National Migration Service and the Comptroller General's records, 2,432,641 visitors were registered last year, down 4.6% compared to 2015."

Panama: Hotel Occupancy Mantains Downtrend

May 2016

The increase in the average number of days that tourists stayed in the country was not enough to offset the drop in hotel occupancy, which fell to 50% in the first quarter of this year.

The difficulties that hotel sector is facing due to the lack of international promotion of the country as a tourist destination and the oversupply of rooms registered in the country explains the downward trend which is still being seen in hotel occupancy rates.

Panama: Call to Eliminate Taxes for Tourists

March 2016

Hoteliers have suggested making Panama a "duty free" zone for tourists, eliminating customs and import duties and refunding ITBMS to visitors.

Faced with the loss of competitiveness in the Panama hotel sector, entrepreneurs are asking for customs and import taxes to be eliminated, and tourists to be refunded the ITBMS charged when leaving the country.

Tough Competition for Hotels in Panama

September 2015

Lack of international promotion is the cause indicated by entrepreneurs of the fall in the average rate in the capital, which has dropped by 40% in the past five years.

The union says the problem of oversupply of rooms in the country began to get worse in 2012, when the international tourism promotion agreement which the government signed with an advertising agency ended.They argue that "...While Panama disappeared from international markets, other countries such as Costa Rica, Mexico, Ecuador and the Dominican Republic increased their spending on advertising. "

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