Solutions are being sought to the lack of promotion of the country and unfair competition from illegal hotels, so that the occupancy rate, which went from 70% in 2011 to 52% in 2015, can be improved.
According to the Office of the Comptroller General of the Republic, the occupancy rate in Panama fell once again last year, going from 56.1% in 2014 to 52.3% in 2015. The average daily number rooms occupied during the last year was 5,466 compared to 5,816 registered the previous year, representing a 6% drop in this indicator.
See also: “Panama Still Not Promoting Tourism”
The situation is causing alarm among hoteliers in the country. Herman Bern, president of Empresas Bern, told Laestrella.com.pa that “… this year some hotels in the country will close. The situation in this sector is critical. There are cases where the profit margin is zero, and the hotel owner has to pay the payroll of workers with money from their personal savings.”
“… Meanwhile, Octavio Vallarino, from Marriot Hotels Panama, said that rather than occupancy, they are concerned about the 30% drop in hotel rates, which coupled with the minimum salary wage rise every two years has led to an unsustainable situation in the sector. ”
The reasons for the decline in hotel occupancy rates are not new. Both entrepreneurs confirm the lack of international promotion of the country, which is now in its third year, the effect on tourism of the potential spread of the Zika disease, and the proliferation of illegal hotels. Hotel occupancy has fallen by at least 20% in the last five years, according to the Tourism Authority of Panama.
…and what about the massive overbuilding?
Oh, wait. That’s somebody else’s fault.
The low occupancy rate of Panama hotels is due mainly to overbuilding & oversupply.. There was a huge capacity increase a few years ago. Normally it takes at least a decade to get back to the old hotel occupancy rates of 80% plus . The prior hotel room shortage is what inspired the overbuilding.
This is the normal biz cycle. Individuals renting out apartment or rooms aimed at the low end of the market,
most of the hotels aimed at the big spenders. Now with reduced hotel rates, they will be competition to the air bnb people. Fee and unfettered competition is what makes any country rich.