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.
The Panamanian government's optimistic projections are based on the publicity that finally began this year at the international level, with the injection of $20 million into the Tourism Promotion Fund.
The campaign to promote Panama as a tourist destination in the main international markets began in November of this year and will be active for eight months.
As part of the new international advertising campaign, the tourism sector in Panama expects visitor arrivals to increase by 125,000 tourists per year, who could generate annual revenues of close to $100 million.
The "Panama Stopover" campaign aims to take advantage of the competitive advantages that the country has, encouraging tourists who are in transit in the country to include in their itinerary an extended stop, which could be up to seven days at no additional cost in the airfare.
In Panama, the National Assembly authorized the transfer of $11 million to finance the rehabilitation of tourism projects in Isla Colón, the Antón Valley and the construction of the Boquete convention center.
Regarding the administrative management to provide the funds, the National Assembly reported that the Budget Committee was responsible for approving two transfers of items from the Ministry of Commerce and Industries to the Panama Tourism Authority.
The Tourism Authority informed CCA-Cocige, responsible for building the Convention Center in Amador, the intention to cancel the contract because of critical flaws in the design and infrastructure.
The work was originally awarded to HPC Contratas P&V, but in 2016, after work was halted for 24 months because of a liquidity problem, the project was assigned to the CCA-Cocige consortium.
In Panama, the National Assembly approved a law initiative, whose purpose is to establish the annual contribution of $20 million for the Tourism Promotion Fund.
Regarding the approved initiative, establishes that the fund will have legal identity, own assets and autonomy in its administrative, economic, tax, financial and functional system, whose assets will be managed through an administrative trust fund, informed the Assembly in a statement.
According to entrepreneurs in the sector lack of promotion of the country is the reason why one million tourists came into the country between January and May of this year, 4% less than in the same period in 2017.
The Tourism Authority of Panama (ATP) reported that 1,091,008 tourists arrived in the first five months of 2018, registering a fall of 3.8% in relation to the 1,134,573 visitors registered in the same period in 2017.
Fifty seven travel agencies and Panamanian tour operators submitted their applications to the ATP to be included in a list of companies authorized to do business in China.
The requests that were received by the Tourism Authority were sent to the Panamanian Foreign Ministry, so that these in turn can be sent to the Chinese authorities.This means that all that remains is for the Asian country to grant approval so that these tourism businesses can start to negotiate with Chinese wholesalers.
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.
In order to compensate for some of the decrease in the arrival of visitors from Colombia and Venezuela, Panamanian authorities have increased promotion in markets such as China, Canada and the USA.
The aim is to attract tourists with greater purchasing power, and to compensate for the reduction that for various reasons has been recorded in the entry of Colombian and Venezuelan tourists.According to the tourism authorities, in the case of Colombia, depreciation of the Colombian peso has had an affect, making Panama more expensive, and in the case of Venezuela, it is the political and economic crisis in the country.
It is estimated that about 40,000 tourists will come from the Asian country, and in 2019 this figure could rise to 200,000.
The arrival of Air China's first flight to Tocumen represents a new opportunity for tourism entrepreneurs in Panama to reactivate the sector and increase hotel occupancy, which has not exceeded 50% in recent years.
Through an agreement with KLM, tourists from the Netherlands who usually only pass through the country to connect with other destinations will be encouraged to stay in Panama.
Currently the Air France-KLM group offers daily flights between Panama and Amsterdam and 6 weekly flights between Panama and Paris. From Panama KLM serves 27 destinations in Central America, South America and the Caribbean.
After having canceled the contract with the company RPL-CSI Panama last year, the Tourism Authority announced that another company will complete construction of the 18-kilometer stretch of highway in Colón.
The 18-kilometer highway between Cuango and Santa Isabel, whose construction had been awarded to the Venezuelan owned company RPL - CSI Panama, will now be finished by another company, according to Nacional de Seguros, who provided security at the time of almost $10 million.
Tailor made tourist packages, modifications in hotels, and learning the Mandarin language, are just some of the aspects that companies must work on in order to receive tourists from China.
The bilateral tourism promotion agreement signed between the governments of China and Panama, after they reestablished diplomatic relations in June 2017, involves much more than a simple framework to promote the arrival of tourists, but also contemplates the requirements that Panama must meet in order to be categorized as a country authorized to be visited by the citizens of China.
The US company SMG has been chosen to manage the Panamanian convention center, which is under construction and will be ready to operate next year.
Minister Him detailed that the selection of the managing company was made at the request of the Chamber of Commerce, Chamber of Tourism and the National Tourism Council. SMG will be in charge of the operation, maintenance and marketing of the convention center. The only process left pending is approval from the Cabinet Council.