Just Google up apartments for rent in Panama and see how many portals pop up.  Airbnb shows up with 532 of them.  As a hotelier you have got to want to cry foul and they often try to pressure government to regulate the business, without much success.

The trend of renting out non-hotel accommodation for a few days is global, and it will grow even more in the next 5 years, meaning that regulating it will be a better solution than banning it.

In the Central America region Panama is where the phenomenon of Holiday Rentals shows the highest growth, despite a law prohibiting it. According to an article in Prensa.com, the Tourism Authority of Panama (ATP) “… has imposed eleven fines of $55,000 for renting out apartments to tourists for periods of less than 45 days.”

Law 80 of November 8, 2012 in Article 21 reads: “any lease of less than forty-five days in the district of Panama, by people who do not possess public accommodation tourist permits (for buildings or residences) is prohibited. This act will be sanctioned by the Tourism Authority of Panama, with a fine of between five thousand dollars (B/.5, 000.00) to Fifty Thousand Dollars (B/.50, 000.00), depending on the seriousness of the offense and / or repetition of such act, by the lessor. Also subject to these penalties are people who by any means, including electronic ones, advertise these services. ”

It is clear that activity damages the formal hotel sector, where entities must bear all the costs of exercising a formal trade and paying taxes, against a totally casual competitor.

In Europe, where in Spain alone holiday rentals generate $4 billion a year-the problem is confronted in various ways, ranging from a draconian ban in the Panamanian style, to its formalization by regulation and taxation. The main argument of those who oppose the ban is that the phenomenon will occur anyhow as holiday rentals are increasingly in demand by tourists, and therefore the best option is to regulate it.

Source: Hosteltur.com