Panama: Hot spot
With its 2857 km of coastline, Panama has a growing tourism industry that has produced positive economic growth over the last 10 years, even in 2008-09, when the world was beset by the global financial crisis. Though quite a small country, Panama has a wide array of tropical islands, beaches and wildlife that brought an estimated $2.6bn to the economy in 2010, according to the Panama Tourism Authority (Autoridad de Turismo de Panamá, ATP).
International arrivals have increased with preliminary data from the ATP showing a year-on-year rise of 12.4% between January and August, from 1.1m international arrivals in 2010 to 1.25m in 2011. International arrivals were expected to reach 2m for the first time by the end of 2011. The Tocumen International Airport in Panama City is by far the main port of entry for arriving tourists, having received 1.16m, or 67%, of international arrivals in 2010. The majority of tourists arriving to Panama City via Tocumen International in 2010 came from three countries: the US (252,837), Colombia (219,250) and Venezuela (131,608).
When the ATP published its long-term development strategy, the Master Plan for Sustainable Tourism Growth 2007-20, in 2008, it highlighted the need to improve institutional capacities at the local and national levels to assure that the economic growth and benefit of the sector is justly distributed. Furthermore, the Panamanian government has explicitly indentified tourism (along with logistics, agriculture and financial services) as one of four pillars of growth in its five-year Economic Growth Strategy, which covers the 2010-14 period.
Indeed, tourism development has been recognised by the UN World Tourism Organisation (WTO) as being capable of significantly reducing poverty as a result of the sector’s natural ability to attract foreign currency and stimulate employment, the latter being highly valued by the current administration under President Ricardo Martinelli.
With arrivals to the country more than doubling from 737,102 in 2001 to 1.73m in 2010 (a figure anticipated to reach 2m for 2011) and employment increasing 49% from 87,374 to 129,771 during the same period, the benefits of the sector’s growth are quite clear. The overall contribution of tourism to GDP has also dramatically increased, from 5.6% in 2001 to around 9.5% in 2010, according to figures from ATP Tourism Reports in 2010. While these figures present an impressive snapshot of the growth in Panama’s tourism industry during the last decade, perhaps the most telling figure is that of annual tourism receipts, which amounted to just $662.7m in 2001, but quadrupled to an estimated $2.6bn by 2010.
Investments have also continued to flow in on the back of stable growth. According to figures from the National Tourism Registry, investment in tourist accommodations amounted to $142m in 2010, with the province of Panama receiving 65% ($92.5m) of that investment, followed by Coclé with 25% ($34.9m); Chiriquí with 5.6% ($8m); and Herrera with 2.8% ($4m).
The government’s five-year economic plan has highlighted particular destinations as having the greatest potential immediate impact on sector growth: the Pearl Islands, the south coast of Farrallon and Panama City were each earmarked for short-term development with investment being poured into various infrastructure projects in these locations. Medium- and long-term targets for tourism infrastructure development include Colón, Boquete, Pedasi and Santa Carolina.
There have also been significant strides made in hotel development over the last decade. Hotels posted a 74% occupancy rate in 2010, according to the ATP, with 1.35m room nights offered during the year – a substantial improvement over the 43% occupancy rate in 2001, when 990,520 room nights were offered. Maintaining improved efficiency of resources and infrastructure will be a key element in the development of the country’s tourism industry.
According to Enrique Pesántez, the general manager and president of the local travel agent Pesántez Tours, Panama’s future success in the industry also hinges on the hospitality of the Panamanian people and the continued growth of the country’s Latin American market. In a statement to local press, Pesántez said, “Latin America has become our largest market and should continue as such due to the economic boom the region is experiencing – especially in comparison to other regions.”
Panama’s tourism industry has showed marked improvement in the last decade and the sector now accounts for nearly 10% of the country’s GDP. Capitalising on key markets, such as those in Latin America, and investing in infrastructure and human resource development will help ensure the sector’s continued success. With international arrivals on the rise and the sector having been recognised as a “pillar” of economic growth, Panama’s tourism industry looks set to embark on another decade of strong growth.