In the country there are more than 30,000 hotel rooms; however, 20,000 are in Capital City, but 80% of Panama’s tourist attractions are in the interior, which creates an imbalance between what we offer and how many people can access them. Many of the countries in the region that compete with Panama have most of their infrastructure outside the country’s main city. This situation forces Panama to rethink where it wants to take the tourist experience.
The Challenge of New Tourism Incentives
Taking into consideration the previous introduction, the legislative authorities introduced an initiative that repeals Law 122, which dictates incentive regulations for the promotion of tourist activity, and the modification of article 9 of Law 80, establishing incentives for investors in tourism companies. It contains positive aspects, although precedents can be generated along the way that can affect it. Ovidio Diaz, President of the Panama Chamber of Tourism, comments that Law 122 should not have been repealed, since it creates a negative precedent in legal security. “The law is approved and why? After having an economy and finance law that generates huge tax credits that are highly concentrated in four or five projects, they say I don’t like this and they have to repeal it to make a new law”, affirms the President of CAMTUR.
A Modification That Seeks to Decentralize
Within what is stated in the modification, the objective is to encourage tourism investments, to create jobs and decentralize the economy. Ovidio Diaz, within his vast experience as a tourist entrepreneur, comments that the sun and beach product in destinations such as Santa Catalina, Portobelo, Bocas del Toro, Pedasi, Boca Chica and Cambutal, are those that require a greater hotel offer to attract more tourists, since which is the most sought after experience. However, it is clear that the initiative will also help the nature product grow exponentially.
To Increase Investment you have to Offer Benefits
It is very clear that if Panamanian tourism seeks to recover time and grow at a faster rate, economic benefits must be offered to those who invest, as does the modification to article 9 of Law 80. Our guest in this special report comments that he cannot say exactly which countries on the continent have applied a similar law, but he is more than certain that in many places where there has been a massive development of rooms and tourist infrastructure, it has been carried out hand in hand with benefits that governments offer to who is making the investment.
More Tourist Offer Creates More Jobs
Tourism activity is one of the main economic engines, it represented $7 billion in foreign currency to the country in 2019. The projection of this law is to attract investments to open 5,000 new hotel rooms in the next five years; and it is estimated that more than 5,000 direct jobs and more than 20,000 indirect jobs could be generated, as well as sustainable permanent hirings once the hotels and complementary activities open. Ovidio Diaz believes that if the law is well applied, it will generate the results for which the tourism master plan was made. “More room supply means more jobs and a positive impact on the value chain, details the President of CAMTUR.
Modification is One of Several Necessary Actions
The law is part of a great mechanism that the Industry requires for it to grow, develop and place the country in the international position it deserves. For this reason, our guest also proposes the creation of other laws, or financial products that help the private sector to achieve the long-awaited development of the industry.
At the time of the worst economic crisis in our recent history, this countercyclical law will generate significant stimulation of the economy and job creation.
