In the race for growth between the number of tourists arriving in Panama, and the supply of available beds, the latter is winning, and it is estimated that it wont be until 2016 that the current occupancy rates are achieved again.
An article by Alex Hernandez in Prensa.com reports that "the occupation in the capital will decrease from 70% in late 2011 to 38% in 2012 in hotels of over 100 rooms, according to estimates from the Panamanian Association of Hotels (Apatel).
The percentage decrease is attributed to there being 6,000 new rooms available which is much more than the demand, even though the number of visitors grew by 10% during the first half of the year.
Among the hotels already under construction and which will open next year are the Megapolis (2000 rooms), the Renaissance, of the Marriott chain on 50th Street (300), the Panama Hilton (351), the Waldorf Astoria (126), Garden Inn (170), and Hyatt Place (167), among others.
Between 2010 and 2014 a total of 10,000 new rooms will be available in the capital city, making about 18,000 hotel rooms in the province of Panama.
After the fall, we will have to wait until 2016 to regain the occupancy levels recorded at present, said the president of Apatel, Sara Pardo. This year approximately 4.6 million tourists are expected to visit Panama. "Growth in the hotel industry has been rapid, despite the fact that the number of tourists arriving every day is not enough to fill rooms that are exist now" he said.
Back in the early months of 2011, employment in the capital city reported a decrease of two points compared to the same period last year. Apatel reports indicate that the average price in the capital has been reduced by five dollars, indicating that hotels are feeling the entry of new competitors.
More on this topic
More rooms on offer will mean a 50% occupancy rate for hotels in the coming year.
Just this year over 600 rooms have joined the market with the openings of various hotels like the Trump, Victoria and Hilton Doubletree.
Hotel industry projections indicated that in October there would be an increase of 4% as a result of the climate change convention held in the capital city that month, but the occupancy rate reached 62.3% while in same month of 2010 it was 68.4%.
In Panama the increase in room supply has caused a price war between hotels trying to attract travelers and increase the occupancy rate which on average is not more than 60%.
Hotel occupancy in the country has been declining since 2011, when it stood at 68.6% dropping to 59.3% within the sector this year, according to figures from the Tourism Authority of Panama (ATP).
During the first four months of 2013 the convention and congress sector revived the hotel sector which recorded an average occupancy of 61%.
Prensa.com reports that "in total, between January and April 831,593 visitors were reported, which is an increase of 4.4% with 34,893 additional travelers compared to the same period last year."It is estimated that during this period about $847.7 million entered the Panamanian economy.
Although the number of tourists coming to Panama City continues to grow, there is still an oversupply of rooms, and in the last 3 years average occupancy has fallen by 10%.
The prevailing oversupply in the sector has begun to affect hotels, whose financial profits have been reduced by 20%.