Panama Investor Blog

A visit to the Authority of Tourism of Panama

In August 7th, we had the opportunity to meet with the new Minister of Tourism of Panama, Jesus Sierra, to talk about the development of Medical Tourism in our country. Amongst many topics, we talked about our wellness program called LaVida Optimal Wellness Destination in which we are receiving retired NFL and NBA players from the United States, to come and visit Panama.  

Medical Tourism in Panama is a product that has the potential to promote the country around the world as the Hub of Wellness. 

 

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Retirement has a Throne

Every year a country of this Planet is proclaimed the #1 place to enjoy the rest of your life after retirement, and its no big surprise that Panama earned this title amongst our civilization. The Annual Global Retirement Index (now on its 23^rd year) ranks the best international retirement destinations, and together with factors provided by InternationalLiving.com ranging from the price of groceries and average temperature, to utility costs and the friendliness of locals, the editors assess the results. After they do all the math, the result concludes that there is simply no other place where retirees can get more for their buck.  PANAMA is the place to be!

Panama is rapidly becoming a Capital for the world to invest into and this brings lots of incentive programs to make it a place worthy of spending the rest of live in. Having the American dollar as a currency and English as a widely understood language, it’s a magnet for retirees moving from the US and the world. This Central American nation has several significant reasons for obtaining this title, such as its pensioner residence program that offers discounts on real estate loans, medical expenses, pensioners entertainment expenses and much more. But most significantly the immigration process has been simplified for foreigners.

Panama has introduced new visas in the past year, that have made it easier to gain residence; and having a population of around 4,000,000 with a growth of 75,000-80,000 a year, has been a factor that encouraged major advances in infrastructure and boosted the economy in many ways. But besides many factors that make this country a “Happening” place, the low cost of living, the heavenly climate found across the country and the incredible scenery all around are key factors of this judgment.  

Some quotes from an Article on Forbes regarding this announcement are:

 

“If you’re planning to retire abroad—because you want to live better for less, diversify your investments or enjoy a greater degree of adventure—you should consider Panama…”

 

“Panama ranked No. 1 this year because it offers a “great combination of variety and value,” “No matter what it is you’re hoping to find, Panama is a good place to look for it.”

 

The Top 10 places on the list were:

1- Panama

2- Ecuador

3- Malaysia

4- Costa Rica

5- Spain

6- Colombia

7- Mexico

8- Malta

9- Uruguay

10- Thailand

Contact us if you are considering Panama for your next social or economic adventure! – we will gladly help you out, and point you to the right direction based on what you desire.

New Howard Johnson Hotel announced and Wyndham opens

Yesterday he laid the first stone of the Howard Johnson hotel to be built in via Argentina and will have 100 rooms The project represents an investment of $ 9 million and should be ready in the third quarter of 2012.

Yesterday also formally opened the Wyndham Garden, located in the area of Obarrio, which will have 70 rooms.

Hard Rock Hotel to open 500 room hotel

After two years of delay since the first announcement, the Hard Rock Hotel is apparently moving forward. Just what is needed in Panama, more hotel rooms. I suppose the folks who operate the Hard Rock know something about the hospitality business we don't know. Is it because the hotels along the coast west of Panama City are always full and the demand is strong for that area? No, I don't think that is the case, but then they must know something about the future of hospitably in that area that most don't know. I certainly hope so because there will be another 182,000 rooms nights available in 2012 along the Panama coast to add to Nikki Beach, Decameron, Bristol, Breezes and others.

MINERVA BETHANCOURTH
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Hard Rock franchise that has a presence in Panama with a restaurant on Avenida Balboa in 2004, will join the local hotel offering the construction of a hotel in the province of Cocle.

The work, which represents an investment of $ 90 million, expected to open in early 2012.

The hotel will be built in the area of Farallon, Cocle Province, will have 499 rooms and will add to the existing hotel supply in the area: Decameron, Nikki Beach, Breezes Resort & Spa.

The construction of the Hard Rock Hotel in Panama is part of a process that started the brand to accelerate expansion of its properties worldwide.

Panama is the perfect location in Latin America to install a hotel, with the number twelve would be the franchise of the same name and number one in the region, said Hamish Dodds, a director of Hard Rock Cafe, on the website www . hardrockcafe.com.

Some managers of the hotels that are operating in the area of Farallon welcomed the new hotel, whose construction has been announced two years ago.

Five more hotels announced for Panama City

According to an article in La Prensa today, there are five more hotels that will open over the next 3 years in Panama City. This is on top of at least a dozen mega hotels already underway and expected to open in the next 18 months. These new entries are aimed more at the business traveler and are considered 3-4 star accomadations. Howard Johnsons, Hampton Inn, Wyndham Gardens and Victoria Suites. Combined they will add another 421 rooms to the greatly expanding room availability in Panama. I would expect prices to start falling in the next 12 months.

alex e. hernandez
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T he construction of new hotels is not only focused on projects whose rooms break record prices. It also points to a segment of three and four star hotels, where to stay for a day can cost between 100 and 300 dollars.

In the next 36 months, will open five hotels which combined represent an investment of 56.5 million dollars.

One of them will arise in the area of El Cangrejo, land adjacent to the residence of the Panamanian boxing legend Roberto Mano de Piedra Durán. This is a U.S. hotel chain Howard Johnson. There are 100 rooms and an investment of 10 million dollars.

Fidel Reyes, director of Fr Consulting, a firm that managed the Howard Johnson, said he also signed an agreement with the Hilton chain to build two Hampton Inn, one on Via Argentina and another in the La Boca, Ancon.

In each will invest $ 13 million and will feature 125 rooms, respectively.

Reyes said there are executives who only visit Panama on business, and prefer to stay in luxury hotels are not expensive, but neither are in the economic category.

Another project that stands in the capital city and overlooking the executive market is the Wyndham Garden, which will begin operations in November.

The executive Jaime Campuzano, who leads the project which invested $ 8 million, said the hotel on Calle 58, Obarrio have 70 rooms.

In addition, in May 2011 is scheduled to open at the Victoria Hotel & Suites, where he spent 13 million dollars and is built on the Via Veneto.

Carlos Herrera, president of Five Star Management, investment firm composed of Panamanians and Guatemala, found that Victoria will have 127 rooms.

For three years he studied the market and found that there was potential for an independent hotel and geared to the executive segment. Thus, 5 hotels will add 421 rooms to the building 5700 in 2012.

Are there any 5 star hotels in Panama?

When it comes to hotel ratings in Panama you never know what to expect. The reason is that any hotel operator can say they are a five star hotel as there are no official rating services. That is about to change as the hospitality industry is taking it upon itself to rate hotels and provide consumers with more reliable information.

From La Prensa

About 30 companies, including hotels, guides and tour operators will participate in a pilot scheme to implement the tourism certification scheme that will evaluate the services offered by companies. Annette Cardenas, president of the Panamanian Chamber of Tourism, indicated that this pilot scheme will start in a period not exceeding three months.

For Solomon Shamah, administrator of the Panama Tourism Authority (PTA), this certification will verify tourism businesses meet the services they offer, because "there are hotels that advertise themselves as five-star when they are not."

There will be a committee composed of private business, the ATP and the Spanish company Applus, international consultancy specializing in certification processes, who set the parameters that will have to follow the companies.

According to Cardenas the lack of a culture of service and good treatment of the visitors are areas where improvement in the short term to ensure the development of this sector.

Panama needs over 12000 hospitality workers!

A recent article from La Prensa highlights the challenges facing the hospitality industry in Panama. They expect another 10,000 rooms to come online in the next few years and there is already a shortage of skilled hotel workers. Everyone I know in the industry complains of this situation and there seems to be little being done to mitigate the situation. I guess like many things in Panama, they will put that fire out when it is burning out of control.

A list of the new hotels, their opening dates and number of rooms is included in this article.

Hotels are looking for 12 000 employees

International standards provide that each room requires a minimum of 1.2 employee.

Alex e. hernández
[email protected]

The Panamanian hotel industry is experiencing a unprecedented growth. About 10 000 new rooms built over the next three years.

Currently rise 10 hotels, including the Doubletree and the Hilton chain Riu Spain. Both will be inaugurated before the end of the year. Furthermore, in the next 12 months will begin to build another six projects.

The estimated investment by the Panamanian Association of Hotels (Apatel) in the next 36 months exceeds $ 2 billion, increasing the number of rooms to about 30 000 across the country.

Beyond the economic impact to the arrival of large chains such as Hilton, Ramada and Hyatt, this awakening hotel brings a challenge faced by other sectors of the economy, the availability of experienced workers and in the case of hotels, which manage a second language like English.

The numbers are compelling. Over the next three years the country must generate about 12 000 skilled workers to meet demand for new hotels.

This shortage has begun to stir the waters of the sector. On one side are the hotels in operation and seek to retain staff at the other extreme are those who seek to have qualified labor to begin operations.

According to Sarah Brown, president of Apatel, staff turnover in the hotel sector has increased in recent months, according to the projections of the trade, this trend will increase as new hotels open their doors, "although we do not with a record of movement of workers, "said Pardo.

He also indicated that there have been cases of employees with more than 20 years of working in a hotel that is changed to another for better pay offer.

The manager of a hotel, who asked that his name, said that over the past five months about 15 workers quit to join the new hotels opening this year. Most had more than five years of experience.

For Jorge Loaiza, President of Royal adviser declined, the so-called "personal cannibalism" has always happened and will be happening in the hospitality industry, while recognizing that it is not optimum.

In his view, there will always be companies that seek to gain the services of people with experience, but adds that the real challenge is to propagate the idea that within tourism, especially in hotels, you can get a paying job.

The skilled labor shortage is recorded at all levels, but high control or management positions are among the priorities of the hotels.

Managers, financial officers, directors and sales staff and coordinators of strategy are the most coveted jobs in the sector.

These people must have previous experience, because "it is not running a hotel than a traditional business, terms and methods are different," said the president of Apatel.

Given the shortage of Panama prepared, hotels described as positive the program developed by the National Immigration Service that allowed hundreds of immigrants legalize their immigration status.

"We understand that most of these people do not have a steady job, so now they are legalized they become another option for finding labor," noted Brown.

Representatives of Hilton Worldwide, to manage three of the five hotels that operate under this brand in the country, indicated that they have not yet begun its recruitment program, but rely on the country's ability to generate human resources required in the sector hotel.

inside

If the capital is a challenge to find skilled labor in other provinces is almost an impossible mission.

Fernando Duque, president of Buenaventura, a company that manages the hotel with the same name in the province of Cocle, said they had to work from scratch with the inhabitants of the area because the hotel experience was nil, even notes that many had never visited a hotel or restaurant.

Duke recognizes the effort made by institutions like the National Institute of Vocational Training for Human Development (Inadeh).

However, he believes we still have to improve skills and bring them to all corners of the country.

Currently, the Inadeh develops more than 30 courses related to tourism and its director, Temístocles Rosas, said that in collaboration with Apatel have trained over the past three years about 14 thousand people.

According to estimates by the institution, one of every two graduates of Inadeh is hired after performing their professional practice.

Inadeh is receiving advice of the French Society for the Export of Educational Resources and the U.S. firm Freeman Group to improve food programs, and training for maids, waiters, housekeepers, among others.

Quality of Service

The lack of skilled labor is not the only challenge facing the hotel industry. Raising levels of care also of concern to the union.

For years Panama has been below average on the quality of care offered to visitors compared with other countries in the region.

In 2008, a survey by Freeman Group indicated that the levels of care in Panama were 70%, 100% being the optimal service-while in other countries reached 80%.

Two years later, the same measurement on 54 hotels in Panama increased service levels to 84%, reaching to most Central American nations. To make this measurement is sent a person posing as guests, who use certain criteria gives a rating to the care provided from arrival to leaving the hotel.

As more hotels are built and to increase the supply, quality of service will mark the line that divides the hotels with high occupancy, those with cold rooms and empty.

Accommodation and education

755 000 - Visitors who entered Panama from January to May.

17.975 - Number of rooms available until December 2009.

16 - Number of schools that implemented a pilot scheme which included matters relating to tourism.

La Quinta Inn comes to Panama

La Quinta hotel chain is a very successful no frills business model and I will be curious to see how well they will do here in Panama. They have been operating for many years in Costa Rica near the airport and you can always be assured of reasonable value and good customer service. Maybe they can help set a new standard here in Panama.

Read all about their Mexico and Central American expansion plans here at hotelinteractive.com

Here Comes La Quinta As the brand plans to open its 800th hotel, it looks to Mexico, Central America for future growth. Friday, August 06, 2010 Beth Kormanik

As far as milestones go, this one is pretty big: La Quinta Inns & Suites is preparing to celebrate the opening of its 800th hotel, likely in the next month or so.

“The company’s performance has improved,” said Wayne Goldberg, president and CEO. “Our growth is the real story.”

Goldberg said the limited-service brand, based in Dallas, is planning for “explosive” growth in Mexico, Latin America South America and continuing its “aggressive growth” in the U.S.

The numbers tell the story. Rajiv K. Trivedi, Executive Vice President of Franchise & Chief Development Officer, said La Quinta plans to open five hotels in Mexico this year and has up to 20 properties under development in Mexico, as well as 15 others in the pipeline in Central America. New construction on a hotel in Panama is expected to start this year and the brand is reviewing conversion opportunities in Panama.

Although no properties are in the pipeline for South America, Trivedi said the brand has started discussions and is establishing infrastructure with employees on the ground developing relationships.

“In the entire region, Columbia and Brazil have the biggest opportunities after Mexico,” he said.

Goldberg added that Costa Rica, El Salvador and Guatemala are target markets. The company also is looking east, and plans to introduce its brand to China and India.

The challenge is to maintain control of the brand and, as Trivedi put it, find the right path. That means determining the right ownership structure -- a management contract, a franchise or a combination --  and building the type of hotel that will meet the changing needs of guests.

The model for select service is different internationally, Trivedi said, in that they should have a lounge and a small F&B operation. That’s a change in profile for the brand, he said.

New construction hotels are creating a mid-tier for the emerging middle class in Latin America. Some of these countries may have resorts, but they lack select-service properties.

“Because of all of these changes, it has become more appropriate for select service to be there,” he said. “It will provide better margins than any other segment of our industry.”

“The timing is right,” Trivedi continued. “There’s a tremendous lack of consistent hotel brands in all of those regions. There are more guests who need these services. We create a value proposition based on guest expectations and the financial experience of our owners.”

Domestically, La Quinta plans to open between 50 and 60 hotels in the U.S. this year, with about 70 percent of those new construction. Only three states do not have a hotel or one in the pipeline. But the rate of growth has been well-managed, Goldberg said. He pointed out that the competition has saturated the U.S. market, while La Quinta hasn’t.

“We have properties all over but don't have the distribution we think we could have,” he said. “We have so many open opportunities to grow, even here”

Positive economic signs such as increasing revPAR, stabilized rates and less new supply from competing hotels should bode well for the brand, Trivedi said.

“There are markets where it makes sense [to grow],” Trivedi said. “The supply increase this year and the next couple of years is so shallow that as we go on to develop it will happen at a much higher rate.”

About 48 percent of La Quinta properties are company-owned while 52 percent are franchised. Less than a decade ago, 98 percent were owned by the company. The balance came from the growth of the fee-based side, and Goldberg said the company will continue this strategy.

“We are owners, operators, managers, developers, franchisers. We play in all of the spaces,” he said. “It is our intent to leverage the brands, not the balance sheet. Our focus today is to leverage a strong brand. We have the wherewithal to grow our brand and our company at the same time.”

Goldberg said La Quinta has continued to invest relatively aggressively at the property level. Last year it spent $60 million at company-owned hotels on renovation and maintenance, which included IT improvements for the brand. This year, he said the brand expects to spend another $60 million in targeted upgrades.

While everyone took a hit during the economic downturn, Goldberg pointed out at least one silver lining for La Quinta.

“The brand performed much better than unaffiliated hotels,” he said. “Independents question whether they should be looking at brands. This downturn has demonstrated the strength that a brand has. Individual hotels realized through this cycle the benefit of the brand.”

Another focus area is on retaining guests. Julie M. Cary, Executive Vice President & Chief Marketing Officer, said the brand has shored up its loyalty program, La Quinta Returns. The intent was to make it more competitive and allow members to earn free nights faster. Cary said the results are that enrollment is up 47 percent over last year.

The brand also did some internal PR to show owners that the frequent-stay program drives market share and increases guests likelihood to stay at La Quinta properties.

“What we learned is even our franchisers realized the importance of the program,” Goldberg said.