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So who's coming to Panama?

by Eric Jackson

"Ten years ago, Panama was a non-exciting place --- nice, but not exciting." So recalled Annette Cardenas, the marketing director for Marriott Hotels of Panama, the single major hotel company operating here that's 100 percent US-owned. But at about that time, Marriott called and told her that they need to open a new hotel in Panama. She was skeptical, but took the job.

In 1997, Panama was getting about a half-million visitors per year, the American military presence and canal management was winding down and making reservations for a restaurant was just about unheard-of. The occupancy rate at hotels here was about 50 percent.

This year Panama expects that one million and one-half visitors will come through the figurative turnstiles. You need reservations to be sure to be served at one of the better restaurants.

The change is evident at the Farmacia Arrocha up the street from the Executive Hotel in the banking district, she noted: "it used to be that you knew everybody --- not now." And what about the restaurant scene? "You go to a restaurant, you look to your right and they're speaking English. You look to your left and you don't know what they're speaking."

So what brought about the change? It's a confluence of factors, Cardenas told the audience at the August 28 Tuesday Talk in Albrook.

"In order to grow tourism, you need things to do," she pointed out. The Decameron Hotel, an all-inclusive resort in Farallon, started to bring in the tourists en masse, often by charter from places like Italy that previously had not been a source of visitors to Panama. "It's a back to back scenario --- one plane leaves and another arrives." The Decameron, she said, was the result of tour operators' demand for tourism infrastructure.

Developer Sam Taliaferro and the marketing he did to sell his Valle Escondido gated community in Boquete was another major factor, according to Cardenas. Plugging Panama as a retirement locale with cheaper food and health care than is available in the USA and the natural attractions of Boquete worked. "Everybody started to come and look. A few people bought and there was word of mouth publicity. These things started synergizing."

The canal expansion project is another factor, bringing in would-be contractors from all over the world in search of a piece of the action. "That, in itself, has created a whole new opportunity for business," the industry of catering to the foreigners and their tastes.

Finally, Cardenas said, there is "Plan B," a "Christmas gift in the middle of the year," Hugo Chávez. "The crazier he gets, the more Venezuelans come here. 'Plan B' in Venezuelan language is Panama, a whole new thing to be explored."

That doesn't necessarily put Cardenas into the anti-Chávez camp. "Let them dream on that they're going to overthrow him," she said of the recent Venezuelan arrivals, "but they're here."

The next big boost to tourism here is going to happen when the Royal Caribbean cruise line starts to use Colon as a home port for Caribbean cruises. This, in turn, is the latest Panamanian tourism gain at the expense of the United States. During the Bush administration the United States has made it difficult or impossible for Latin Americans to get visas and heavy handed government officials and hysterically xenophobic Americans have combined to make the experience for many who can get visas to enter the USA unpleasant. Because of that we have many South and Central Americans who used to shop in Miami and New York coming to Panama for that purpose instead, and the rise of upscale malls to accomodate them. We are seeing Panama displace Miami as the air hub of the Americas, and more direct flights between here and Europe that avoid Mr. Bush's "War on Terror" hassles.

So now Panama has a lot more hotel rooms than a decade ago, and they are occupied at an 89 percent rate. The cost of lodging in these hotels has risen to about two and one-half times what it was in 1997. "If you don't call early, you're not going to get a room."

Yes, there are vacillating and often ineffective government policies and other annoyances, and there is uncertainty about the high-end housing market in Panama City, Cardenas allowed. Yes, in the long run all things must pass. But from the hotel operators' point of view, the boom will be with us for awhile. "We don't expect it to change in the foreseeable future."

Meanwhile Panama is revamping the way that it collects and reports data on visitors, and certain demographic shifts are already evident. The euro is high against the dollar, and even if US housing prices are stagnant or declining, that's not the case in Europe, so we are seeing a larger percentage of European visitors. The fact the European workers get longer vacations than do Americans also drives this part of the boom, she noted.

However, Cardenas warns that "you cannot bask in your success." Panama clearly needs to reform its educational system to provide the skilled work force that modern tourism needs, she pointed out. "We, as a country, need to step back, see what's happening, and decide what we're going to do."

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