To the surprise of many, tourism generates more indirect income than the Panama Canal. According to figures from the statistics department of the Tourism Authority of Panama, during 2017, the country received 2.5 million tourists, bringing in over USD4.45 billion in the form of of foreign exchange or expenditure, equivalent to 11% of GDP.
The tourism sector in Panama is characterized as being one of the most influential for the economy thanks to the various options offered by the isthmus such as beaches, nature, and urban landscapes. Although it is true that Panama is the most visited country in Latin America, and some visitors remain in the country as tourists, those visitors who arrive in Panama for a connection to another country account for most of this traffic. The airport of Tocumen and its main airline, Copa Airlines, are characterized by being the hub of Las Americas, a double-edged sword for Panamanian tourism since, despite receiving many visitors, most are only in transit.
According to the last report of the Tourism Authority of Panama, visitors from the European continent lead tourism revenues. By far, travelers from Spain show most interest in getting to know the isthmus, with a total of 65,192 visitors in 2017, likely because they share a language. Visitors from France followed, admittedly far behind, with 36,150. Germany and Italy claimed third and fourth-largest European source markets, contributing 33,458 and 23,172 travelers, respectively.
As for visitors from within Latin America, during 2017, Panama registered the majority of visitors from Ecuador, which totaled 81,968 tourists, while from Argentina, 80,716 visitors were received. Brazil had 79,242 and Peru 57,151.
The country is giving a great boost to cruise tourism, remodeling the main ports, training personnel and signing agreements with the main lines. During 2017, the main cruise ports in the country received about 382,626 tourists. The leisure sector represents 70% of the total, compared to 30% of businesses visitors. The investment of USD200 million in the new Convention Center Amador will shift the balance, hopefully, to an even 50-50 split between leisure and business tourism. Despite all this, the hotel sector has reported losses in the first months of 2018, begging the question: what does Panama lack to become a first class tourist destination? Experts indicate that the missing piece is the country brand. Costa Rica has done an excellent job, for years, developing a concept that is recognized worldwide—a concept of ecotourism, sustainability, and service, all coming together within the phrase pura vida, or pure life, as its slogan.
If Panama wants to become a destination in its own right and not just a transit hub, it needs bullish investment in marketing, where it can develop a country brand and show the attractions and assets of the country. In April 2018, an International Tourism Promotion Fund, which starts operations in August 2018 with a budget of USD20 million, was created to promote Panama in international markets. Even more, the signing of diplomatic relations with China opens another gateway—this time on the other side of the isthmus—for tourists from the Asian country to discover Panama. The natural beauty and rural offerings will be the attractions that Panama will offer to attract more Chinese tourists, mostly used to travel to other destinations that include culture. Air China will connect Beijing and the Panama City with twice weekly flights between the two capitals.
Already a commercial hub connecting two oceans and several continents, Panama can leverage its geography, transport infrastructure, and tourism offerings to dominate the Latin American tourism market.