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Those who travelled to Panama a few years ago remember with pain having to pay expensive hotel rates and hearing many times “there is no availability.” Times have changed, as supply finally reached and surpassed the demand.
Over 4,000 new hotel rooms entered the market between 2010 and 2012, and 4,000 more will become available in the next two years. Most of these hotel rooms are located in Panama City and in the nearby beach area, from Capira to Farallon.
La Prensa Newspaper recently published an article declaring “hotel price wars” in favor of consumers. A 40% rise in hotel rooms in Panama City has already caused a 20-45% price reduction, said the article.
Tourists will greatly benefit from a market which favors them and makes Panama City a very affordable destination. The mid-range hotels ($80-$120) give tourists especially good options.
Older hotels with a more established reputation and clientele have had to refurbish to be able to maintain consumer preference. These hotels have chosen to continue with the same rates, while offering additional benefits such as free wireless internet, breakfast and discount on amenities in and out of the hotel.
New hotels such as the RIU Plaza are offering rates of $69 on weekends, while the Hard Megapolis is at $90. These hotels have had more difficulty competing to get their share of the 1.5 million tourists who entered the country up to September of 2013.
Indesa, a consulting firm, believes that the tourism sector will have to do separate campaigns and create alliances to bring more tourists to the country. According to Indesa, hotel occupancy for 2014 will be 52%. For a hotel to cover expenses occupancy levels must be at 40% plus.
Hoteliers in Panama City expect that the new convention center being built in Amador will put Panama on the map as a convention destination. As Panama opens new markets and creates more products, the demand will reach supply, but for now tourists can enjoy Panama at bargain prices.