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
The ban on <45 day renting in Panama is just another sign of crony socialism from the govt. All such type of laws and rules should be seen for what they: an attempt to protect corporate interests against the best interests of the people, the voters. Corporate entities should always be forced to face the full force of competition at all times and in all places. Anything less is simply corruption and fascist-style govt. against the best interests of the country, and of its people. Full blown competition is also ultimately in the best interests of the corporate entities, in this case, hotels. Until socialist Latino countries realize the error of subsidizing corporate ventures of any kind, these countries will be doomed to second class wealth creation in the world economy.
Of course, pandering to hotels and corp. interests makes for a great source of funding, both legal and otherwise, for politicians.
Regards
Harold
It is important to bear in mind that travelers who book a private residence in lieu of a hotel room are doing so because they can not afford the very high cost of Panama City hotel rooms and would not visit here if they had to pay those costs. In the meantime they spend much money in restaurants and on other tax generating activities. What kind of hotel room can one get for $50 to $60 a night? These visitors will not be staying at the Waldorf or Hilton or Riande or Hotel Panama.
The competition from private rentals to Panama City hotels was created by the greed of hotel owners, now a days every hotel wants to be a 5 star hotel or at least charge like it were. When I first came to Panama in 2006 one could find decent hotel for less than 50$ a night, now it is impossible, it is even difficult to find something for less than 80$ a night. The hotel owners must understand that a really vigorous tourist industry requires all levels of lodging, from 5 star to 2 star and appropriately priced, in Panama all they want to build is 5 star. What is a businessman from the interior of Panama who needs to visit the capital for business going to do? is he going to pay 100-120$ to sleep? no way, he finds a friends family who will receive him for the night at 50$. At least that is what I do. JL