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. Following this imbalance of supply and demand, average rates continue to decline and consequently the hotel industry is reporting less income.
Sara Pardo, president of the Apatel, told Prensa.com that “… We need an emergency plan for the next 24 months and convention tourism will increase the entry of visitors, but is not a long term solution. The situation is worrying especially as we currently have hotels under construction. There are some 1,200 rooms which will become available, most of them at the end of the year ”
“… Apatel is proposing the creation of a public-private fund to boost tourism. ” “… We are aiming to create a public-private entity to concentrate in a single entity everything related to promoting the country … This entity would be responsible for analyzing, finance, implementing all actions and plans for tourism promotion.”
Interesting that the minister of tourism reports a significantly higher % growth in demand for hotel rooms. If you look at all the different statistics they put out it becomes obvious that they really do not have a clue as to the growth rates and statistics. While all statistics do show that the growth of hotel rooms have outpaced the growth of demand this is very good since there was a lack of hotel rooms that restricted the overall growth of Panama and drove room rates up significantly above intentional rates for an city of equivalent status. The excess growth has brought the industry into balance and gives Panama the opportunity to have continued growth in all sectors of business and tourism. All is good and more in balance now. The long term growth of more hotel rooms is also much lower. Looking at just end of the year increase is a pretty useless number when hotels take about 5 year to build from start to finish. The real number is new hotel starts which I believe is close to 0 those if Panama counties to grow there could be another hotel shortage in 5 to 7 years. Obviously Sara Pardo and Apatel does not really know what they are talking about. Reality the growth of the hotel industry is healthy and all is good for Panama in general. Hotel rates are back to international price levels quality of service may go up and Panama can grow.