TOURISM: Hotel boom in Panama could see price and staffing war
A massive 73% increase in the number of hotel rooms in Panama is a boost for tourism but a challenge for operators in terms of pricing and staffing.
New hotels in every quarter of the cityThe hotel industry has recorded an unprecedented growth with an estimated 17,392 of rooms in the province of Panama by nextyear. In 2010 the inventory was 10,000.
The attendant staffing challenges have led to the creation of a Skills Council, with the British Embassy playing a prominent role.
In the last three years 20 new hotels have been built in Panama city, with 14 more under construction . They range from giant structures and famed names like Hilton and Marriott to boutique hotels like the recently opened Saba Hotel on Via Argentina.
Four of the 10 largest hotel chains in the world have a strong commitment to domestic tourism, highlighting he name of Panama as a tourist destination.
There are others like the Ritz Carlton and Four Seasons that still have plans to invest in the local market.
After 22 without a hotel in Panama ,Hilton, the fourth largest hotelier in the world when measured by number of rooms has returned with a bang and will have, five hotels, with 1,231 rooms.
Two of them are already operating, the Doubletree and Hilton Garden Inn, while in 2013 the Panama Hilton and the Waldorf Astoria will open their doors..
The next project to come on stream will be HIlton's Embassy Suites already under construction.
Jaime Campuzano, president of the National Council of Tourism told La Prensa that the arrival of large chains in the country will raise the level of care and attract tourists with high purchasing power.
"These chains with high prices, will raise the standard of service," he said.
Besides Hilton, Wyndham, surpassed only by InterContinental worldwide, is also committed to Panama as a tourist destination of international stature,
The U.S. firm has four hotels in the country, including a beach resort.
Marriott has also expanded its presence in the country. Besides expanding its main complex, Marriott Hotels Resorts, in the banking district, the chain operates two hotels under the brand Courtyard and Marriott Executive (formerly Finisterre).
The chain segment is also betting on the beach with the 180 rooms Marriott Casamar in San Carlos.
In total, 14 hotels with 2,985 rooms operate under the umbrella of the three chains,
In addition to internationally renowned hotels Panama is home to some of the largest in the region like the Trump Ocean and RIU Plaza.
In October when the final 900 rooms are readied the Hard Rock Hotel will be among the 10 largest by number of rooms in Latin America with 1,500 rooms.
For the tourism operator Enrique Pesantez, the arrival of international chains will help improve the marketing of destinations Panamanians.
But rapid growth like the California gold rush that played a big role in Panama’s development, brings it challenges. The, somewhat messy uncontrolled rush to fill the shortage of rooms is generating headachea among managers of hotels already operating.
The inflow of tourists, 1.2 million between January and July, has not been enough to fill the new rooms available in the market which is leading to price reductions, especially on weekends.
For some experts, the hotel industry is on the threshold of a "price war". They note that if a drastic drop in rates occured, it would take five years to return to the prices being offered in 2011.
It is expected that once the market stabilizes and hotels under construction, start to operate the war would start in 2014, and it would take between 4 and 5 years before hotel occupancy rates record apositive growth as happened last year.
The other problem facing The hotel industry is the lack of skilled workers in all areas, but particularly in service departments
There is an urgent need for around 10,000 thousand employees from managers and administrators, to waiters, waitresses, restaurant and kitchen staff.
The deficiency has hardened the battle for workers , forcing up wage levels, and causing problems for local reataurants who are losing staff to the big oerators.
To increase the supply of workers, the private sector is developing a proposal to increase the number of foreign workers that can be employed. Currently the percentage is fixed at 10, and the proposal for an increase will will be sent to the labor authorities.
In addition to experience in service related areas, there is a strong demand for people able to speak a second language particularly English.
The hotel industry with the British embassy taking a leading role, is working on the creation of a Skills Council responsible for standardizing all training related to tourism.
The body, will start operating in January.
