By Latin American (and even global) standards, Panama’s near decade of unprecedented growth has been impressive. Even during a global financial slowdown, Panama managed to stay the course and pull through. And while most of this is attributed to banking/financial services, shipping logistics, and Canal-related business, there is one market that has been making huge inroads, as well as an economic impact: tourism. Tourism has brought in millions of new visitors each year, and believe it or not, has encouraged external growth in investment as a byproduct of it. In order to adapt and survive in the modern global economy, Panama (and everyone one else) needs to adapt. Can tourism be that boost that takes them to the next level?
The importance of tourism on a service-based economy
By definition, the majority of Panama’s current economy is based on what’s called “services.” This spans the board as far as an economic category, but in Panama’s case, it roughly refers to financial services, shipping and logistics, transportation, and real estate. And yes, it also refers to tourism. Panama’s tourism industry is one of the most diverse in the world, due to the country’s natural abundance, massive hotel infrastructure, urban hub, and it’s strategically easy to travel to location for airlines. Panama’s peak was in 2014, when nearly 3,000,000 visitors came through Panama (according to Tocumen).
Each of these visitors, whether cognizant of it or not, supported Panamanian businesses, and helped to build jobs numbers for not just the year they visited, but future years as well. Tourism doesn’t just help businesses that are directly involved in it either (like hotels, hostels, restaurants, tour groups, airlines, bus lines, etc.). It also brings people with considering spending power into an economy that rallies around services. Tourism supplies the people demand that businesses need to survive, and thrive.
Where is everyone going, and what are they spending their money on in Panama?
It’s a safe bet that when tourists come to Panama, they have Panama City as a part of their trip. Other than just flying in, many tourists opt to stay in the city for at least a few nights, and most do it to shop, dine, and do tours. This makes Panama City the #1 tourist destination in the country, although may would say that’s just by default. Within Panama City, Casco Viejo is far and beyond the most popular tourist destination. In any given weekend night, tourists and locals will spend up to $2,000,000 in local Casco businesses, which is a major feat considering the size of the neighborhood. People also spend lots of money at Panama City’s malls, specifically MultiPlaza, which now has the highest commercial real estate value per square foot thanks to it.
Other huge income sources for tourism are natural attractions and adventure tourism. Towns like Pedasi, Boquete, Coronado, and Bocas del Toro have all flourished in recent years due to this. And the numbers keep growing, with no sign of stopping. Tourists love Panama’s beaches, mountains, wildlife, and adventure sports options, and there is no shortage of companies to meet that need. Eco/Adventure tourism relies on transportation companies, marketing companies, real estate, insurance companies, and local Panamanian skilled and unskilled labor to facilitate it.
With Panama’s tourism industry growing and diversifying, it helps propel the overall growth and diversity of the country’s economy. And this is a great thing, especially as Panama becomes more competitive on a global scale.
