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.
It is estimated that in this context of economic crisis, Panamanian hotels owe $630 million to financial institutions.
In the first quarter of 2019, hotel occupancy in Panama was 55%, 13% below the rate reported in March last year, and the decline is due to the lack of international promotion.
Statistics from the Panamanian Association of Hotels (Apatel) specify that in the country the hotel offer amounts to 32 thousand rooms, of which only 42% were occupied in the first quarter of 2019.
Between the first quarter of 2017 and the same period in 2018, the number of visitors that arrived in the country registered a slight decrease of 1.4%, but the overall expenditure made by them increased by 2.7%.
According to sector's figures, between the first quarter of 2017 and the same period of this year the number of tourists fell from 734,000 to 723,000, and the currencies received registered a slight increase, going from $302 million to $310 million.
Citing high operating costs and the increase in the airport tax, the low cost airline VivaColombia has announced that it will stop flying between Panama and the cities of Bogotá and Medellin.
Through a statement, the airline reported that "... VivaColombia, the first low cost airline in the country, announces that it will cancel its Bogota-Panama-Bogotá and Medellín-Panama-Medellín routes as of May 20, 2018. This decision is made taking into account the high operating costs and the increase in the airport tax which went from $15 to $35, representing an increase of 135%."
In Panama, it is expected that the convention center that is being built in Amador and which will be completed by the end of the year will generate $18 million in its first twelve months of operation.
Construction of the amphitheater, being done the consortium CCA-Cocige, is almost 70% complete to date, and it is expected that it will be finished by the end of 2018.The administration of the convention center will be the responsibility of the American company SMG, which was selected last September by the National Council of Tourism.
In Panama 30 hotels are now working with an application that allows travelers to book and rent rooms for a number of hours and not for a full day.
In an attempt to raise their occupancy rate, which at the national level has not managed to exceed 45% in recent years, some hotels in Panama have started trying out alternatives.For example, an application made by the Spanish company ByHours, allows travelers to rent a room for 3, 6 or 12 hours, during any period of the day.
Between January and July, occupancy fell by 6% compared to the same period in 2016, and projections by employers for the second half of the year are not very encouraging.
The hotel trade union believes that there are not many options for trying to change the situation in the sector, mainly caused by less tourism promotion at an international level in the last four years.The situation also indicates that perhaps it is not only lack of promotion explaining the low occupancy rates, but also a clear oversupply of rooms.
At the request of the private sector, selection of the management company for the convention center will be done directly and not through a tender.
The National Tourism Council (CNT) is the institution that will select the company that will be in charge of managing the convention center that is under construction in the Amador Causeway. According to authorities at the CNT, it was the same entrepreneurs who raised the need to avoid a tender process and instead award the contract directly.
On September 27 and 28 representatives from hotel companies operating in Central America will be meeting in Panama City.
Roberto Diaz, president of the organizing committee, told Panamaamerica.com.pa that"... during the event they expect the participation of 300 people, including representatives from El Salvador, Guatemala, Colombia, Mexico and Costa Rica."
Due to non payment of interest on an issue of corporate bonds to investors the Panama Stock Exchange is suspending trading of three bond issues by the Panamanian company RG Hotels.
On June 12, the securities issuing company reported in a statement that it is thoroughly analyzing its financial situation, and announced they will not pay interest to investors who bought corporate bonds.
Tourism companies have denounced underspending in the budget for international promotion of the country and assert that the official figures for hotel occupancy are not real.
Industry representatives argue that the hotel occupancy rate published by the Tourism Authority merely represents a sample of some large hotels in the capital ", while data from hotels in the interior of the country are not even taken into account in the statistics.
While occupancy rates and average prices continue to fall, the Panamanian hotel market is preparing to increase its supply by another 1,200 rooms at the end of the year.
The Panamanian Association of Hotels (Apatel) reports that in recent years there has been a 209% increase in the number of rooms available in the country, in contrast to demand which has only grown by 5% annually.
The business sector claims that the bill regulating the use of parking lots in shopping malls and public offices goes against private enterprise and sends signals of legal uncertainty.
The approval on its first reading of the amendment to Act 45 of 2007 which dictates measures on the rights of consumers related to the use of parking lots in shopping malls and public offices has been opposed by the private sector.
The campaign against property being rented out for tourism purposes establishes penalties with fines ranging from $5000 to $50,000 for those who promote and commit the crime.
The Tourism Authority of Panama (ATP) has opened up a communication channel for businesses and individuals to report cases of houses rented to foreign tourists in the capital, in compliance with Law 80 prohibiting this activity.
Tourism companies propose to boost the capabilities of the Destination Marketing Organization bureau and turn it into a public-private entity separate from the ATP.
Tourism entrepreneurs are asking the new government to revive the campaign to promote the country as a destination for convention tourism and expedite the negotiation of agreements with foreign airlines in order to increase the flow of tourists and improve the hotel occupancy rate, which is currently 59%, due to an oversupply of rooms.