Hoteliers do not rule out in the coming months that layoffs will be made, there is even talk of closing and embargoes.
Although tourist arrivals grew at an annual rate of 4.5% since 2012, this increase was not sufficient to absorb the oversupply of rooms.
This difference has made the average rate fall since 2013 to date some $37. In the market you can find rooms for $60, which a year ago was trading at $150.
During the last three years the number of hotel rooms grew 209%, but the number of tourists increased only 48%.
This reality must add that Panama does not have an international promotion strategy since 2012, when the contract with the agency BB&M expired.
Since then, Panama has disappeared from the radar of tourists and international operators.
Due to the low occupation that has begun to affect profitability, there are hotels that have cut services they offered, like free internet and buffet. In the management aspect at least three hotels have rotated staff to reduce operating costs.
Currently, in the capital city there are more than 18 thousand hotel rooms, and there are still entering the market by a thousand rooms.
"There are hotels that are red due to the price war that has caused the oversupply of rooms," Sara Pardo (President of the Hotel Association of Panama said)
Although nothing is confirmed, there are at least 15 hotels are in the closed or have been offered for sale due to losses in recent years. "Nobody wants to accept that it is in crisis, but the fact is that there are hotels going through a bad time," she said.
* It is estimated that during the months of June, July and August hotel occupancy in the capital city will be below 50%.
Employers surveyed warned that there are hotels at risk of being seized by banks in the coming months because they have not made the payments financing for its construction.
Despite the low prices of the room benefit the Panamanian consumer, the fact is that the hotel industry was not designed for the local market.
Between 2008 and 2014 more than 1.3 Billion dollars was invested in the construction of new accommodation establishments.
80% of investment is concentrated in the province of Panama, followed by Coclé, Chiriquí and Los Santos.
But the crisis in the hotel sector in the capital city is affected with an occupancy of only 40% in June, to the list of problems the division between industry players and the differences between guilds is added and Tourism Authority of Panama (ATP).
Following criticism by the perceived slowness in the management of the ATP in the last 12 months, the administrator of the institution, Jesus Sierra, convened a meeting with businessmen involved in tourism last Thursday.
At the presentation held without the presence of the media at the request of Sierra, it was indicated that in the second half of the year set aside $12 million to promote the country in markets like the US, Mexico, Brazil and Colombia.
Of this total, about $ 8 million already committed to contracts with media such as CNN, and to develop a digital marketing campaign.
It was also announced that is still under review the specifications of the tender for the advertising to be responsible for the international promotion between 2016 and 2019.
The tender was conducted at the beginning of year, but not the details of the process are known and all that has been said is that investment in promotion in the next four years will exceed $100 million.
This year the budget for promotion and marketing is $11 million, of which 3% was executed until 31 May. Sierra said that reports the performance is low because the institution pays the end of the contract, but said they have been working.
Differences
During the meeting the representatives of the Panamanian Chamber of Tourism (Camtur) and called for concrete results Apatel to increase tourist arrivals, while Sierra urged patience and avoid alarmist comments and hallway.
"Many people now criticizing our management were in the National Tourism Council (NTC) in the past government and kept silent about the things that were done," he said
Although Sierra did not mention names, the president of the CNT, which is the board of the ATP, between 2010 and 2014 was Jaime Campuzano, current president of Camtur.
After criticizing the leaders of the tourism associations for not informing its members about the work of his office, Sierra said it is important that the private and government sectors to work together, and said it would set aside any "attitude" to achieve the best results for the country.
Tour operators who participated in the meeting criticized the leaders of the unions not to allow the entry of new members and said that they have no financial support to bring tourists as well as receive other companies.
They said there are hotels that offer lower prices than the tour operators prices, a situation that was described as unfair by the administrator of the ATP, who criticized the fact that some hoteliers do not respect the price agreed with operators to sell their rooms.
Meanwhile, entrepreneurs took the opportunity to question the ATP has not answered letters sent to international tourism wholesalers interested in bringing groups of visitors on charter flights.
Apatel president was emphatic in saying that the hotel industry is not seeking a grant from the State to resolve the current crisis, and stressed that all he asks is that we take swift and concrete measures to increase the country's promotion actions.
He noted that as the hotels in the capital city are in the red, the interior operate with an occupation that does not exceed 30%.
He warned that rates continue to fall, a situation that threatens to small hotels and tour operators that may not continue to compete under these conditions.
During his speech, the president recommended that the ATP and Camtur work hand in hand with the private sector, but also called speed in execution.
A high percentage of hoteliers believes that 2015 is already lost and its projections for 2016 are equally negative. Guild feeling is that the low occupancy rates and the war will continue at least until 2018 and considers that everything depends on the creativity of the industry and the authorities to promote the country.
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