Panama’s tourism industry has turned to the government to help fill its glut of vacant hotel rooms.
The new administrator of Panama’s Tourism Authority, Gustavo Him, met with tourism industry representatives July 16 to advance a plan to accelerate tourism growth figures in the country. The result is an emergency plan to spend US$8 million during the rest of 2015, with 70% of that focused on digital media advertising. The total 2015 advertising spend from the Tourism Authority in 2015 will be US$12 million, of which 95% will go to advertising, according to Him.
The emergency plan seeks to increase Panama’s tourism arrivals by 50% by 2019 and to entice more transit passengers to make a stay in Panama. A total of US$100 million is allocated for promoting tourism in Europe, South America, and the United States, through 2019.
Panama’s hotel market has suffered recently, having to compete with the increased popularity of peer-to-peer accommodation websites, such as Airbnb, as well as with a large number of recently developed hotels.
A 209% increase in hotel rooms in recent years has far outpaced the 5% growth in demand. According to Panama’s Tourism Authority, there are more than 20,000 rooms in 650 hotels in the country.
Despite the alarm bells regarding hotel vacancies, tourism spending in Panama continues to grow, as visitors flock to Panama’s white-sand beaches, mountainous jungle interior, and metropolitan capital city.
A recent report from Panama’s General Accounting Office shows that tourism in Panama from January to April grew 5.8% compared to the same period last year. Visitor spending was also up, registering a 14.7% increase over the same period in 2014.
In 2014, tourism revenue in Panama increased by US$179 million from 2013, reaching US$3.23 billion, surpassing revenue earned from the Panama Canal.
According to the World Travel and Tourism Council, Panama’s tourism spending as a share of GDP in 2015 will be 4.9%, as it has been since 2011.