Investment in tourism and hospitality in Panama is at an alt-time high. What does that mean for investors?
Panama's current and future infrastructure projects read tike a wish list for any global travel hub: airport expansion, new roadways, a new rail system, thousands of new hotel rooms, large-scale event venues and fast-growing mega-malls. But Panama's growing importance on the business and tourism grid brings its own set of challenges.
The number of foreign visitors to Panama grew between 7 and 8 percent between 2011 and 2012, according to Ernesto Orillac, sub-director for the gobernment tourism agency, known as the Autoridad de Turismo de Panama, or ATP. "Panama will end 2012 with 2.2 million visitors," he said, a staggering number considering Panama's actual population is just 3-5 million.
But Orillac is even more optimistic when it comes to growth trends at Tocumen International Airport, the nation's primary international gateway. The rate of travelers using the facility surged 17 percent between September 2011 and September 2012, and more passengers now pass through this hub every year than the entire population of Panama (5-8 million in 2011). As more people get out of the airport and into Panama, according to Orillac, the nation's business and leisure tourism segments will expand further.
Building the appropriate infrastructure for a surge in visitors is a constant challenge. Tocumen, which serves as a hub for Copa Airlines, recently debuted a new northern concourse, and a $670-million contract has been awarded to build a southern concourse with at least 20 new gates within the next three years.
Within the city limits, the government aims to alleviate intense traffic congestion with projects that include the construction of Central America's first urban rail system--the Metro is slated to open its first line in 2014--and the extension of the Cinta Costera waterfront boulevard, which will wrap around the historic Casco Antiguo district-a move that some critics fear will jeopardize the neighborhood's status as a UNESCO World Heritage Site.
Investment in infrastructure is "extremely important" to keep Panama competitive, according to Al Petrone, CEO of Bristol Hospitality Group. The group owns the Bristol Panama, a luxury hotel that opened a new 111-room tower in 2012, and the Bristol Buenaventura, a beachfront resort that was due to become a JW Marriott property by press time. "Panama is competing with other countries in the area for...