sábado, 20 de febrero de 2016

Problems and prospects of tourism in Panama





1. A lot of bureaucracy, little initiative of small businesses and communities

In 2015 the budget of the Costa Rican Tourism Institute (ICT) was approximately $ 60 million, while the budget of the Tourism Authority of Panama (ATP) amounted to $ 80 million. The ATP has approximately 600 permanent employees. Those who must be added a large number of temporary workers.

The growth of government workers is a way to absorb some of the informal sector, alleviate unemployment and mitigate potential social conflicts. In 2015, from January to December, they joined to form the new 27,270 public sector employees, according to the Comptroller General of the Republic. In January, the number of staff in the public sector and in December amounted to 194.855, 222.125, an increase of 14% over this period. Last year they were named an average of 2,479 new officers every month. More appointments months were February, with 8,554 new contracts, and December, 5,417.

The bureaucratization of the ATP does not affect the large hotel company, but hinders small business enterprises and communities. The establishment of tourist routes, the design and promotion of tours, organizing consortia and networks of communities and small businesses, among other initiatives, not receive any support from poorly trained staff, more concerned about having under its control these activities.

The brake and abandonment of small business ventures and communities has prevented the development of rural tourism, ecotourism, with the exception of Bocas del Toro, a destination promoted by Costa Rica. In conclusion, the supply of Panama is still restricted to convention tourism and shopping.

2. The crisis of business tourism and conventions.

While the hotels in the city of Panama 79% in 2011 expanded to 2015, in the same period the number of tourists who stayed in hotels increased by 44%. It was available in 2011 in the city of Panama 5,837 rooms and 10,451 in 2015.

In 2011 an average of 3,807 rooms per day and in 2015, a daily average of 5,466 rooms occupied. This is the reason why in recent years, hotel occupancy in the city of Panama has declined consistently.

These results are attributed to factors such as the oversupply of hotels and the appreciation of the dollar against other currencies that have made Panama an 'expensive' destination, said the president of the Tourism Commission of the Panamanian Association of Business Executives (APEDE). The devaluation of the other currencies against the dollar has affected the country, because European and American tourists prefer to turn to cheaper destinations.

 Hotel Occupancy (percentages)


However, the problems of tourism in Panama has swelled. The extreme specialization of the Panamanian tourism convention and shopping is strongly linked to the service economy of this country. One of the biggest attractions is the Colon Free one, where you can find of low -cost products, especially electrical and electronic (PlayStation, laptops, tablets, mobile phones, smartphones and more).

However, the Colon Free Zone is losing competitiveness. The Association of Users of the Colón Free Zone reported that in January 2016 of this year 55 companies closed. The situation has prompted the association to seek government assistance for the zone that would reduce the costs of doing business there.

"This can be done without the need for a change in the law and it may be a decision that involves only a board meeting," the association said. "It is imperative that the executive and the National Assembly approve reforms to the law which will provide better tax conditions and equal footing compared to any other free zone or special economic area in the country to make it attractive for new investors".

More of the same or diversify tourism?

Panama has achieved a market niche in the international arena: shopping and conventions. Investments and experience in this field has become a prime tourist destination. The problem is that it has failed to diversify supply. The Tourism Authority of Panama (ATP) manages the Atlapa Convention Center and Figali Convention Center. Amador Convention Center currently under construction, with an investment of $ 193.7 million.  

Common sense indicates that Panama should complement its traditional offering with other products, mainly ethnic tourism and rural tourism. However, the model promoted by the government throughout the country, is a copy of the model followed in the cities of Panama and Colon. It is now thought to build convention centers in the cities of David and Chitré... "Before the boom and tourist development that is taking Panama!"

An example of diversification of supply is giving Costa Rica. His government presented a strategy to position the country as an attractive destination for conference tourism and meetings, which will build a convention center in December 2015.

"The business tourism has proven to be a highly dynamic industry around the world, which breaks with the seasonality that affects tourism as the biggest boom months are May, June, September and October, these being the off season for our country, "said Tourism Minister Mauricio Ventura, during the presentation of the strategy.

It is anticipated that the building will begin construction next year in an area of 10 hectares located on the outskirts of the capital, near several hotels and the Juan Santamaria, the country's largest international airport. The strategy also includes a plan to promote Costa Rica as a destination for meetings and conferences, which contains tools to organize, develop and implement communications and marketing actions.

Costa Rica is a powerhouse in ecotourism, now will complement tourism Convention. Panama should be the reverse.

Inequality and tourism diversification.

The German expert Karola Tippmann, who both contribute to the tourism strategy Costa Rica, defined tourism in this way "meeting of people with people." Certainly, the big tourist infrastructure is necessary for a small segment of tourists with high purchasing power, but not the main attraction for people traveling waiting satisfaction with exceptional cultural and natural experiences. This alone can offer small businesses and rural communities located in places of great natural attractions (mountains and beaches).

Costa Rica managed to conquer an important position in the global tourism market because I took advantage of a broad base of small urban and rural property and the ability of business organization communities. The meeting of people with people is summarized in a popular expression of international fame: "pura vida". The small tourist property has an unparalleled advantage: personalized service and flexibility to design products tailored to the tourist.

Panama's situation is different. The service economy against a large concentration and centralization of resources and activities in terms of territory and property.  According to the UNDP country's wealth, measured from GDP, Domestic, is highly concentrated, the province of Panama with a little over 50% of the population it produces 71% of GDP, followed by a Colon and Chiriquí, which together shared 89.4% of the wealth in 2012 with 70% of the population.

The other provinces and counties have a lower contribution to production National and located below its population weight.

Suggestions for an alternative strategy.
1. The business sector related to tourism and conventions are not interested in diversifying supply possibly support the creation of new convention centers. Given this situation, it requires external support. I do not mean to consulting, research, training, etc. because that spare in Panama. I think the establishment of international alliances. 

The Master Plan for Sustainable Tourism 2007-2020 Panama suggests "Develop integration and Synergies With ecotourism, Costa Rica", "Generating synergies for integrated destination with Costa Rica and to attract demand from that fate." In practice, this means partnerships between Panamanian organizations of rural and ethnic tourism Costa Rican organizations as the Costa Rican Association of Rural Community Tourism (ACT) and National Ecotourism Consortium Cooperative Network, COOPRENA R.L. The joint business organization is the best way to transfer knowledge and provide training. Design and sell domestic tour packages is a great way to make money and expertise transfer from Costa Rica.

2. In 2008 we visited Spain for establishing a cooperation agreement with the Spanish Association of Rural Tourism (ASETUR). At that time, the most interesting was the proposal to identify partners in the search for co-investment in our countries. The co - investment between the European and North American companies and owners of rural tourism Panamanian establishments located in rural locations with tourist potential, is the best way to boost the tourism alternative to Panama.

3. This is only possible if associations, cooperatives, and rural and ecological tourism in Costa Rica develop. These organizations must be independent of the public sphere and created with the aim of doing business together. Previous experience indicates that politicians view these organizations as a platform for their activities; this is the cause of its failure.

We have come within Panama, including indigenous reserves, and found small tourism business owners who have established itself without any kind of state aid. They have leadership, entrepreneurial spirit and organizational skills. They require international partners to expand the community-based tourism and ecotourism, not a charity initiative, but as pioneers of a sort of profitable tourism, Panama urgently required.

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