Panama Investor Blog

Panama Tourism Revenue To Reach $2,4 Billion

By the end of July, tourism revenue grew 15% when compared to the same period of 2009. If sustained, Panama could reach $2,4 billion by the end of this year. Panama received $967,4 million in tourism revenue in the first seven months of this year, 15% more than 2009, when the country netted $837,7 million.

During these first seven months the quantity of tourists also increased to 991.000 visitors, a 10% increase when compared to last year.

Gringo Bashing in Costa Rica?

This article is written by an American businessman who lives and works in Costa Rica and appears on Insidecostarica.com. Over the years the Costa Rican government and the tico's have begun to take Americans and the economic benefits they bring for granted. Where tico's once were welcoming and desirous of Americans to come visit and live there, it seems there is a growing anti-American sentiment at worst and gringo gouging at the cash register at best. As this gentleman points out, if Americans quit coming to Costa Rica, their economy would be devastated. I think this same sentiments could apply to Panama although I don't believe North Americans make up as much of the overall economy in Panama as they do in Costa Rica.

By John Holtz*

Just how dependent are we, in Costa Rica, on the economic well being of the United States and its population? I'm not convinced that Costa Rica really knows the answer to that question and perhaps does not care too much.

Maybe economic ignorance is a good thing since the US economy and most Americans are on the emotional cusp of deep depression brought on by way too many conflicting, contradicting expert opinions and figures drowning out the much needed feelings of optimism for the future.

We are told that at least 60% of all tourists who come to Costa Rica are from the US and that is a lot.

In a land where facts tend to conflict, I have heard 30,000 and up people have come from the US and live here but the records show as of March 31, 2010 only about 13,795 or so are in CR legally. But, they do spend a lot of money and they do invest heavily in Costa Rica. **

In total, the estimated amount of legal expats in Costa Rica is 346,956 from all over the world. That´s about 8% of the population. **

Thanks to the Spanish language newspaper, La Nación, we learned that CR´s growth for 2009 was not 2.2% as advertised but rather -1.8% and that is a shocker. Costa Rica´s deficit of trade jumped an astounding 86% for the 1st seven months of this year and make no mistake about it, the United States is CR´s number one customer.

The unrealistic and perplexing dollar – colon exchange rate is making CR products, the cost of living and services priced out of most international markets and there is no relief in sight. None at all! (Just try and get a straight answer as to why!)
Of investments, Americans are at the top of that list and they heard very few complaints from the nationals who held up the “Costa Rica For Sale” sign high above their heads during the boom years.

Costa Rica has survived for many, many years from the milk of the United States and it has been fairly easy with nifty slogans like “Pura Vida”, “Switzerland of Central America,” “Military Free”, “First Democracy”, “No Artificial Ingredients” etc. to attract Americans.

But, during the last several years the tits of mother America have gone dry and it looks like they will stay at just a dribble for more years to come. Perhaps many if you believe some economists.

Even Costa Ricans who work in the US and remit money home have had a dramatic drop from 2.3% of the CR GDP in 2007 to only 0.3% in 2009.

It is impressive the estimation of CANATUR and ICT who are paid well to pump only sunshine of these millions of tourists who are crowding the airports every day. However, According to a report on Canal 7, the average stay per tourist has dropped from 14 days in 2007 to just 10 or 11 days in 2010. None of those experts interviewed took a shot at how much money was typically being spent each day and even during the Costa Rica two week school break, hotels were only 46% full and restaurants mostly empty.

Having been touted as inexpensive, Costa Rica is being marketed as a good place to retire and live on the cheaper side of life. At least that´s what the real estate and tour agencies now promote. Sorry to bring in a little reality, however, it is expensive living in Costa Rica unless you are willing to make serious changes in life style plus you might wish to buy a gun.

In 2006 until 2008, while pieces of Costa Rica were being sold off, prices skyrocketed for everything from property to food stuffs because there were buyers on every airplane that landed and they have not come back to earth since then.

But now with American inbound cash flow slow to none, I am finding that Costa Ricans are not as warm in their welcome as when we had lots of money to spend.

Recently and too often, I have heard and read the time honored clichés more than I want: “Yanqui Imperialists”, to “Gringos Go Home” and even “Kill the Gringos” in Spanish language blogs and newspapers. Especially in response to the US sending ships and patrols to root out the drug traffickers at the invitation of the Costa Rica government. (Don´t blame Gringos, blame yourself for voting not once but twice and making the invitation in the first place.)

So Ticos, my advice as a businessman, is to drop this Gringo Bashing stuff! It´s not getting you anywhere.

Stop invading our hotel rooms, our homes, and our cars. Stop over charging us for everything and anything plus don´t even think about adding more taxes than we already pay in Costa Rica. And while you are at it, give us some efficient security, okay?

And if Costa Rica would rather ride the big horse to Beijing, may Zorro ride with you because the country will need a swift sword of justice on her side.

This is a new day and possibly the start of a new “norm” where Costa Rica will need to adjust and learn to compete on the open market for both tourist money and foreign investments in general.

Most of all, if Costa Rica wants foreign money she needs to embrace expats and should very much include them into the policy making process instead of keeping them outside the decision making loop. Only citizens should vote. That´s a given. But expats need to be heard because without them, there ain´t no economy, and “That´s a fact Jack” (Movie “Stripes” Bill Murray).

Costa Rica, think about the negative economic and social impact if expats did indeed pack their bags and took their money out of the country.


*John Holtz is the Executive Director of the Center for the Studies of Modern Management www.modernmanagement.org and can be reached at: [email protected].

**Source: Dirección General de Migración y Extranjería

Foreigners can now stay in Panama 180 days on tourist visa

Over the last few years there has been a lot of controversy on the length of stay allowed under the tourist visa. The last administration even shortened it to a maximum of only 30 days which created major problems with real estate sales of vacation properties. Although never fully explained, the government finally relented under pressure and allowed the 90 day stay which had been the normal time allowed under previous administrations. Now the Martinelli administration has changed the visa to allow for 180 days which in my opinion is a very wise move. Why would you want to restrict peoples ability to spend money in the country by forcing them to leave for 3 days and then return for another 90 day stay. Lets just hope the police and immigration officials are well informed of this new provision.

Where does the tourism authority get funds for marketing the country?

In an earlier post I pointed out that Panama will be spending over $40 million to market the country and this article from La Prensa sheds light on where the money comes from. The majority is from the 10% room tax applied to each nights lodging and the other bulk of income comes from the entry tax into the country.

ALEX E. HERNANDEZ

[email protected]

And increased flow of tourists during the first half in about 7%, similarly increased current revenues of the Panama Tourism Authority (PTA).

From January to June, the institution raised $ 27.5 million, $ 3.9 million more in comparison with the same period last year when it raised $ 23.6 million.

The tourism authority has projected revenues of $ 40 million at the end of 2010. The income of the institution are the result of charging the fee for airfare, lodging rate and the lease of Atlapa, among others.

By way of airport tax raised $ 4.7 million in lodging $ 12 million in ticket $ 5.7 million, while the Atlapa rental income exceeded one million dollars.

With the fiscal reforms that became effective in July, the Ministry of Economy and Finance will be the entity responsible for collecting the tax on lodging, but the entire collection will be transferred to ATP.

Panama Tourism Budget Nears $50 Million

Panama's tourism minister has been very busy putting together airline deals and promoting the country at a variety of fairs around the world. According to this article in La Prensa, the tourism budget is closing in on $50 million. They are going to need a lot of tourists to fill the 10,000 or so new hotel rooms coming online soon.

alex e. hernández
[email protected]

The Tourism Authority of Panama (ATP) will next year with a budget of $ 48.4 million, a slight increase compared to the one approved for this year is $ 47.7 million.

The total for 2011, $ 31.1 million for investments (64%) and the remaining $ 17.3 million (36%) for operation.

ATP sources indicated that about $ 10 million will go to pay the advertising campaign developed by BB & M and should be submitted in the coming weeks.

Within the capital budget included $ 4 million to promote Panama as a destination for entertainment with a capacity to mobilize people from other countries.

To encourage the organization of congresses and conventions, the Tourism Authority of Panama offered at no cost Atlapa convention center for holding events with over 500 participants

Google director to speak at Panama Tourism Forum

Each year the American Chamber of Commerce here in Panama sponsors a tourism conference which never fails to provide important information about Panama tourism and other related industries. I have had the honor of speaking at this conference several times over the years and I always find the speakers to be enlightening and the subject matter to be timely. I encourage my readers to attend this upcoming event.

Here are some details:

The Amcham forum will be Sept. 9th- 2pm-6pm at the Miramar Intercontinental.
Tickets are $25 for Amcham members, $35 for non-members and $15 for students.
Call Amcham at 301-3881 to reserve your ticket.

Amchams 10th annual tourism forum will feature two important international speakers- David Hyman, the Latin American director of internet sales will speak about promoting tourism businesses on the internet and Bich Lien Kaldahl, the director of incentive sales for Continental Airlines with 10 years of experience about Panama, who will speak frankly about what Panama needs to do if it seriously wants to become a convention destination- one of the main goals of the Martinelli administration.

Other speakers include Fidel Reyes with his always fascinating report on Panama’s tourism sector, English ecotourism expert Andrew Coates presenting the “Ruta Verde”- a amazing proposal for an ocean-to-ocean pedestrian and bicycle path, Juan Benaventes, former trainer for Royal Caribbean on creating a culture of service, Agnes Santomeno, owner of Reprosa on Panama’s amazing handicrafts, Jose Golder on how Azueros became a tourism destination and Steve Thompson of the surf lodge Morro Negrito on Panama as a surfing destination.

Direct flights Tocumen-David-Bocas Del Toro

For those of us who live or have businesses in Chiriqui or Bocas Del Toro, the expense and hassle of getting there may be mitigated early next year if the tourism manager has his way. I have reported on this before, but the tourism authority has been in the papers again  and I think it is important that the good news continues to be spread. 

The cost of travel for tourists to the interior of the country is greatly increased when you consider that most visitors have to stay overnight in the city both coming and going. They have additional costs of ground transportation and then the very expensive per minute cost of regional airfare to contend with. All in all it can cost the tourist more after they arrive in the country to get to our province than it does to get to Panama from abroad. When you add it up it is just plain prohibitive to visit the best parts of Panama. Connecting flights from Tocumen will greatly reduce the inconvenience and costs and will help expand tourism into the interior of the country.

Machine translated from La Estrella

PANAMA. Travel from Buenos Aires to the province of Bocas del Toro, Panama, is not so far from reality, as the Tourism Authority of Panama (ATP) aims to introduce low-cost semidirect flights from anywhere in Latin America, even from States USA.

This was confirmed by the consultant of the ATP, Ernesto Orillac, who said the flight could be introduced to the country by the end of 2010 through the airlines wishing to join.

According to Orillac, the mechanics would be for passenger charter flights, which do not have a set schedule, from any city or country: Bogotá, Buenos Aires or Canada, can reach the Tocumen Airport and immediately board another plane to take them the airports of David, Chiriqui and Bocas del Toro.

"The five million tourists coming through Tocumen Airport a year would not have to waste time on the contrary, with this will be saving time and money," said the adviser of the ATP.

This, according Orillac because arriving at Tocumen take a couple of minutes to transfer from one plane to another and so go to Bocas del Toro and David, as the airline sells airfare to Panama in one package to the destination choose the traveler.

'For starters, begin with the airports of Bocas del Toro and David, but we are waiting to give us the order than at the new airport of Howard, which is ready "he said.

AIRPORT HOWARD

Regarding the newly constructed track at Howard, Orillac said the jobs are ready, even already installed the control tower and all that remains is to start operating, which could be before year end 2010.

Across the airstrip at Howard, was Orillac, tourists come faster to the beach hotels, which are popular within the country.

WHAT HAPPENS IN THE INTERIOR?

On Monday, Minister of Economy and Finance, Alberto Vallarino said we do not have enough good airports within the country which negatively affects tourism.

For Panama  to be considered a tourist destination, they must have air connectivity.

Therefore, the ATP seeks to promote tourism through new travel connections, in addition to the more than 60 direct flights that already has in the country as to Costa Rica, Colombia and even the Asian continent, he said.

Hydro Power Versus River Rafting

River rafting has been a part of the Boquete Chiriqui experience well before I arrived here in 1997. I have made several rafting trips down the less active parts of the Chiriqui Veijo with my family and it was an inspiring journey. Several companies operate rafting adventures in Boquete and by and large they bring a great deal of tourism to our community.

Now these businesses and the adventure tourism that has sprung up around it are in jeopardy. The Chiriqui Viejo river than runs near the border of Costa RIca is now being harnessed for hydro electric power which includes damming the river in a number of places to extract the valuable energy it contains. Panama is hungry for new sources of energy and hydro, which makes up a majority of our energy in Panama, is continuing to grow in leaps and bounds. Unfortunately, like most modernization and "progress" some very good things take a back seat or are eliminated entirely by the advances. In the case of Boquete's river rafting, the hydr'os will eliminate any water passing through the river in areas that are considered some of the finest rafting experiences in the world.

Is there a solution or a compromise that could be found to allow river rafting to continue while much needed energy is derived from the river? In a number of similar situations around the globe, governments and private enterprise have found it beneficial to release sufficient water for several hours each morning which allows for river rafting and the tourism it brings to flourish without the hydro's losing much in the way of revenue. Lets hope that Panama's leadership will consider this matter seriously before the switch is thrown and Panama's only river rafting industry has its lights put out.

Local tourism operators work to resume flights to Pedasi

Pedasí is a small town situated on the south-eastern tip of the Azuero Peninsula on Panama’s Pacific coast. It is located in the Pedasí District, in the Los Santos province. Over the last few years it has become very popular as a vacation spot and  there have been some development in the area for retirement and vacation homes. One of the major challenges has been access. It is about a 5-6 hour drive from Panama City and flights to the airport had been canceled because of low traffic part of the year. Some of the tourism operators in the area banded together to guaranty the regional airlines a certain volume of seats for each flight. This is exactly the kind of initiative that one must do in order to achieve success. If you haven't already had an opportunity to visit this part of Panama you should do so. It is really beautiful and unspoiled. Click image to enlarge map.

Here is a press release on the flights.

Flights Open To Pedasi, The Jewel of Panama's Azuero Peninsula Pedasi, Panama
-----
The Pedasi business community, in conjunction with the Panama chamber of Commerce and the ATP, has worked together to open an exciting new flight route in Panama.

The drive to Pedasi can take up to 5 hours.  Now, with this 12 passenger flight, tourists, investors and area business people will be able to get to Pedasi in under and hour!

WHEN?
First flight to launch on February 5th, 2010!

FLIGHT SCHEDULE
Flights departing Friday & Monday

12:31pm -- Departs Albrook   
1:26pm -- Arrives Pedasi   

1:41pm -- Departs Pedasi   
2:36pm -- Arrives Albrook  

COST:
Approx $155.50 round trip, depending on gas tax

See more at http://www.aeroperlas.com

Prison island to become tourist attraction

When I think of a prison island the movie Papillon comes to mind with Steve McQueen. The setting was Devil's island off the coast of French Guiana in South America. Panama had its own island penal colony, the infamous Coiba Island a few miles off the coast of the Azueros peninsula. According to Wikipedia:

"Coiba was home to the Coiba Cacique Indians until about 1560, when they were conquered by the Spanish and forced into slavery. A penal colony was built on the island in 1919.

During the years that Panama was under the Dictatorships of Omar Torrijos and Manuel Noriega, the prison on Coiba was a feared place with a reputation for brutal conditions, extreme tortures, executions and political murder. Nobody knows exactly how many people were killed in the prison during this period, but sources claim that the number could be close to three hundred. As such, the island was avoided by locals, and other than the prison, was completely undeveloped.

With that bad bit of Panama history closed in 2004, came some good news. The island would remain undeveloped as a national park, making it a rich ecological wonderland. I have been to the island several times during fishing and diving expeditions. I won't forget my first trip when it was still a penal colony that catered to fishermen with 6 small "hotel" rooms run by the prisoners. The prisoners had the run of the island and the guards would lock themselves up at night. On the way to the island I was told how we would not see any boats or people other than prisoners as they all stayed away from the island due to its reputation. You can imagine our surprise when we rounded the bay into the island and saw a small cruise ship anchored. What was even more surprising were several dozen naked foreigners playing  volleyball on the beach near our 6 room "hotel". When we arrived at the shore the housekeeper/prisoner told us that this ship was a nudist group and they stopped to see the island. The prisoners who ran the "hotel" were embarrassed by the nudity and told us with disgust that these folks didn't even close the door when they went to the bathroom. Fortunately for us they all headed for the ship and sailed away.

The island of over 50 square miles is truly a wonderland of flora and fauna, both on the island and in the sea around it. Only a small amount of the land was used for agriculture during the years as a prison so most is still forested and in its primeval splendor. Now the Tourism authority is considering making the old prison buildings into a tourist attraction. I think that is a great idea as many would probably like to see the place and hear the tales of torture, murder and escape. But the real attraction is the unspoiled beauty and that should be the focus because it is the largest uninhabited island on the pacific coast running from the tip of Chile to Alaska.

Scientists from the Smithsonian Tropical Research Institute have proclaimed Coiba an unparalleled destination for discovering new species. Rachel Collin, a Smithsonian project coordinator said: "It's hard to imagine, while snorkeling around a tropical island that's so close to the United States, that half the animals you see are unknown to science.”

Machine translated from La Prensa

After 90 years as a penal colony, the island of Coiba, in the Pacific province of Veraguas, officially closed on December 29, 2009 its doors as a prison center.

  The National Prison ordered that the last prisoner serving his sentence on this site that will probably never return to host the nation's most dangerous criminals.