Setbacks of IDB loan affect tourism and hoteliers. Cortizo is losing it in the economy.

Panama Tourism

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Of the $100 million approved for the Tourism Authority, which corresponds to the Comprehensive Urban Development Program for Cities with a Tourist Vocation, of which six destinations and the historic center of the capital are part, only 2.5% has been executed. The purpose of the credit is to promote and correct the shortcomings of tourist points, but the pace worries.

The Pacific coast, one of the tourist attractions of Panama that is part of the improvement plan of the IDB loan ArchivoLa Estrella de Panamá

The delayed or slow execution of the loan granted by the Inter-American Development Bank (IDB) to the Panamanian Tourism Authority (ATP) has made members of the sector uncomfortable. Of the $100 million managed in 2018, which is equivalent to the entire loan to encourage the Comprehensive Urban Development of Cities with a Tourist Vocation, only 2.5% has been executed, according to ATP data.

The idea of ​​​​this credit lies in promoting the tourist spots of Bocas del Toro, Boquete, Tierras Altas (Chiriquí), Pedasí, Santa Catalina Taboga, Portobelo and the Pacific coast. For this, the bank requires several studies or diagnoses, which translate into consultations, that identify the shortcomings that exist in each destination and the works that can correct the deficiencies to contribute to tourism development. For example, among the projects are listed everything from improving the sanitary infrastructure, availability of drinking water, to solid waste management, signaling and security for tourists, road improvement or training of personnel linked to certain projects.

Despite the good forecast that could represent promoting these sites, this year an original budget of $5.1 million was assigned as part of the loan that after its modification was $5.4. Of this money, the ATP requested $3.6 million for the projects, but until June (2022) it had executed $510 thousand, which represents 9.34% of the modified amount, as read in the published transparency report on the entity page.

In 2021 something similar happened. Of $5 million assigned, the modified budget was $2.1 million and the ATP executed $519 thousand.

In 2020, a trend for consulting services was carried out to prepare a studies land use plan and climate change scenario for Pedasí, Bocas del Toro, Boquete, Tierras Altas, Soná and Taboga, which was awarded to the Mexican consortium formed by the companies Idom , SA and Grupo Suma for $2,347,200.

The Star of Panama consulted the ATP to know the progress of the projects described above and the reasons why the loan is executed at that rate. They sent a questionnaire of four questions that they promised to answer to this medium, after two days and until the closing of this edition, the information was not received.

A source linked to the sector indicated that “there are some projects underway, but many others await endorsement from the Comptroller’s Office.”

“The delay is hurting us a lot, because if it is a loan for development and training people, not executing it is a wasted resource,” lamented Maru Gálvez, director of Apatel.

A short, medium and long-term schedule prepared by the Panamanian Hotel Association details that 14 projects and/or consultations were scheduled for 2022, ranging from hiring a firm to study solid waste in Bocas del Toro, to supplying water, or sustainable tourist mobility in Boquete.

According to data provided by Apatel, the pandemic caused the closure of 84 hotels and closed last year with 25% hotel occupancy, tourism being one of the activities that the government should bet on to reactivate employment and the economy.

Until June, hotel occupancy registered between 50% and 60% in Panama City, according to figures from Apatel (taking into account that 20% of the offer has not yet opened), however, recent closures and protests caused cancellations by 50%.

The tourism sector is clear about its potential, it has similar attractions to its competitors, such as Costa Rica, Colombia or the Dominican Republic. What is missing is “the product”, that is, what is done at the destination. “The loan had that purpose, but its execution is very slow,” Gálvez added.

The IDB loan program, designed to guarantee its effectiveness, is broken down as follows: $19.8 million (23%) is intended to be invested in consultancies for firms, $3.5 million (4%) in individual consultancies, totals $54.6 million (64%) , while $390 thousand were allocated to training. These activities are developed in the short (44%), medium (17%) and long term (39%).

Currently in the bidding process there are seven projects totaling approximately $3.1 million, while three projects with a value of $5.3 million are in the award process. According to data provided by Apatel, there are five programs under execution amounting to $2.3 million, and in terms of reference or in the phase of preparing the specifications they list 10 projects totaling $8.9 million.

The objective of the IDB loan is to contribute to the urban and socioeconomic development of small and intermediate cities with a tourist vocation in the following axes: access and quality of its services and urban infrastructures; increase tourism development with an inclusive character, improving its equipment and tourism management, and social cohesion; and strengthen the ATP in the planning, management and promotion of tourist cities.

Chamber of Tourism requests restructuring of Promtur

The National Chamber of Tourism questions the effectiveness of the campaigns abroad and the figures presented. Promtur affirms that they were prepared by reliable sources and references in the industry

The National Chamber of Tourism questioned the veracity of the figures presented by Promtur during a meeting promoted by the union. According to a statement issued this Tuesday, at the request of the tourism unions, Promtur presented a report entitled “Business Intelligence of our country”, which included the first half of the current year. However, the Chamber “states that it lacks veracity both in the figures and in the methodology, and does not reflect the reality of the sector today.”

An unfortunate phrase for the director of Promtur, Fernando Fondevilla, who spoke with “La Estrella de Panamá” in response to the Chamber’s statement.

“We have an opportunity to continue integrating ourselves as a sector, we are transparent, we appreciate the feedback that the Chamber provides,” said Fondevilla. She added that the figures presented emanate from leading firms in the industry.

The Chamber describes the current situation as one of the most difficult in its history. After the pandemic, when they tried to recover the occupational level, they question the promotion in question, while the entity assures that it has invested $10 million, of the $20 million budgeted for the campaign awarded for a period of two years to the Beautiful Star consortium, and that if the trend of 2021 and 2022 is maintained “it will be possible to recover from the high season.”

Members of the sector are not only uncomfortable with the slow progress and execution of projects in tourist destinations, but also doubt the effectiveness of Promtur’s promotional campaigns, in charge of attracting travelers to the country. The hoteliers have told this medium that “they feel they are not taking off.” That for years they have fought for an international tourism promotion office and now that it is a reality, it is “disconnected” with the national and international reality. Promtur does not share this criterion, since it points out that in the Forum for the Reactivation of Tourism, the Chamber has a representative, “we are willing to listen to your needs,” says the director.

The Chamber of Tourism complains that it lacks a direct communication channel with Promtur’s administrators and board of directors. They also point out that the promotion does not protect or promote the visit of tourists to the country, as other destinations have done. “This inaction on the part of Promtur in handling the reputational crisis reflects the inability and disconnection with the true need of the industry as an engine for economic reactivation,” the statement read.

The other side of the coin is read in the Promtur Business Intelligence report when it refers to the revenue reported for June, which exceeded pre-pandemic values ​​​​by more than 25% due to the total demand for room-nights sold. and in the daily rate. In this way, they report that “between January and June of the current year, an economic impact of $182.6 million was registered vs. $175.6 registered in 2019.” These figures are based on the report delivered by the STR company, a reference for hoteliers 37 years ago.

“The numbers we are showing are in line with the hotel performance that the large groups are experiencing. The Chamber of Tourism indicated that the numbers were not clear and we are trying to explain the report,” Fondevilla told “La Estrella de Panamá.”

According to the director of Promtur, “the total number of passengers who have booked from January to June 2022 to travel to Panama is 284,711, which represents $752.6 million in economic impact for the country generated by Promtur (direct, indirect and induced). ” The figure , according to Promtur, is obtained by the number of visitors, the average spending per customer per day, which is $296, which includes consumption, transportation, room (without airfare) and average nights of stay . of the campaigns is measured by the interaction of visitors on the page, the purchase of tickets and promotional packages and other indirect and induced factors resulting from the visitors’ stay in the country.However, taking as a reference the number of reservations (284,711) multiplied by the daily expense ($296), the result is $84, 2 million; To this, the number of nights of stay and other factors would have to be added to reach the $752 million that Promtur alleges.

The entity in charge of promoting the country in the world defends that since October 2021 the tourist brand “Panamá Lives for More” was launched, which invites you to discover the historical cultural heritage, the green and blue heritage that refers to the wonders of two oceans and paradisiacal beaches.

The Chamber immediately requested the comprehensive restructuring of Promtur, in order to meet the objectives set for which the organization was created. I have expressed that he has tried, through different means, to convey the feeling of the sector, but Promtur ignores his considerations of him.

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