Panama looks to be new player in terms of cruise destinations.

Panama Tourism

In December 2024, the Norwegian Cruise Line (NCL) company will make its last itinerary in Panama. The cruise line did not offer a particular reason for the decision.However, both the tourism sector and the administrator of the Panama Tourism Authority, Iván Eskildsen, are aware that the Pacific port in Amador, where passengers from various cruise ships disembark, do not present the best conditions for boarding. and landing.The work carried out by the consortium made up of Jan De Nul and Harbor Engineering Company, a subsidiary of China Communications Construction Company, presents an advance of 90%, the debt that the government maintains with the developers, which until September 2022 was estimated at approximately $30 million of a total of $206 million prevents its conclusion. Neither the ATP nor the Panama Maritime Authority specified to this medium the amount owed to the consortium or when the work will be ready to receive visitors.An NCL spokesperson confirmed to La Estrella de Panamá that they will maintain departures from Panama until the aforementioned date, although they did not respond to a questionnaire that sought to clarify the reasons that motivated the company to complete operations in Panama on the aforementioned date.Last Thursday afternoon, as in an attempt to retain the cruise line beyond 2024, the government improved incentives for shipping companies through Executive Decree 8 of March 9, 2023.The NCL announcement has fallen like a bucket of cold water for the sector. Especially since 2015 the country has made efforts to promote itself in the world as a Home Port or base port operation for shipping companies, with the purpose of promoting the tourist destination. But NCL’s withdrawal simply sends the wrong message.”If the shipping company is going to withdraw, it will be a very strong blow for Panama, because the fact that such important companies have chosen Panama as a Home Port and then withdraw, says that Panama is not ready to be a Home Port, “he said. Juan Vasconez, co-founder president of Explore Panama, and president of the Tourism Commission of the Panamanian Association of Business Executives (Apede).Among the most sensitive problems faced by cruise ships in the Pacific port are logistics, infrastructure and services in the same port. “There is no adequate structure, tourists wait under the sun and the shipping company relies on the Panama Convention Center to carry out the process of boarding and disembarking the ships,” Vasconez explained. This complications the shipping companies because they have to send staff to the convention center, located a few kilometers from the port, and transfer all the passengers, “which obviously represents complications and costs that were not contemplated, in addition to the experience that it provides tourists”, exclaimed the representative of Apede.The most disconcerting thing for the sector is that it is not yet known when the works in the port will be completed, despite being an important work to promote the industry.The minister of the portfolio, Iván Eskildsen, recently recognized the importance of completing the terminal, although he did not offer a precise date when the structure will be ready.To this are added the claims of Carnival, a company that at the end of 2022 surprisingly received a communication from Colón 2000, operator of the port of Colón and Amador, reporting that since October 1 of that year the Monjasa company enjoyed exclusivity in the dispatch of fuel, for all the ships that enter the Cruise Terminal of Amador and Colón, endangering the operating costs of the Panamanian route.There are many factors that influence a company of this nature to remain in a country like Home Port. The first responds to the incentives that the government gives to shipping companies, as well as tax exemptions. The second point is the international promotion carried out by the country to attract tourists and encourage departure from its ports. Another important point is the profitability of the business. If the above is not fulfilled, according to a source linked to the sector, “it is very probable that the shipping companies will re-evaluate their permanence in the country.”The idea was to adapt port conditions to receive passengers, however, the Pacific terminal has so far not met expectations.In this regard, the Panama Maritime Chamber reminded the ATP that in December 2022 they were asked to address the claims received related to security in the embarkations and disembarkations of various cruise lines and the complexity of the immigration process they face.The Chamber was forceful in reminding the Panama Maritime Authority and the ATP to show initiative to avoid the shipping company’s announcement.“Today it is unavoidable that forceful and immediate actions be taken to prevent similar positions on the part of other cruise lines, harming not only the continuity of cruise tourism in our country, but also the international image of Panama and considerably affecting multiple economic sectors that are directly and indirectly benefit from this activity,” the statement read. In the same way, they urged the government to guarantee correct practices under current regulations and standards, revaluing the commitments of free competition and legal certainty essential to preserve foreign investments that, with the joint effort of the public and private sectors, managed to attract for the benefit of our country.According to data from the Directorate of Migration, from September 2022 to February 2023, the entity registered 169,227 visitors between crew members and passengers from a total of 179 cruise ships.Through the Atlantic, 53,595 tourists (11,044 crew members) entered, while through the Pacific there were 90,687 passengers (13,901 crew members).An average of nine cruise ships dock weekly with 10,000 tourists visiting Panama, which translates into an economic injection of approximately 13% to the Gross Domestic Product annually.The administrator of the Tourism Authority of Panama, Iván Eskildsen recognized these difficulties as part of the tasks that the country must improve and was optimistic that the company continues to consider Panama a Home Port.Incentives until 2027The modified Decree extends the incentives for cruise lines until 2027, and not as established in the 2019 decree until 2024. In the new decree, the Panama Tourism Authority agrees to assume the payment of the cost of the toll of transit through the Panama Canal practically indefinitely, when before the wording established a transit.The first article specifies that the cruise lines that establish their base port in one of the ports of Panama, as part of the incentives, will reimburse the payment “of the toll corresponding to transit” through the Canal, according to the current official rate published by the Channel Authority.It also grants recognition of 100% of the toll to cruise ships that verify that a minimum of 80% of their passengers are international and for transits that have been made before the promulgation of the decree, the reimbursement would be 80% of the payment of the Toll.The decree extends the incentives with different percentages until the year 2027. Even so, the appeal does not seem to convince the cruise line’s decision.In 2021 Norwegian Cruise Line decided to establish operations in Panama as a base port in Colón and Amador starting in March 2022 and during the 2023 and 2024 seasons, supported by the incentives established in Executive Decree 35 of 2019, and Executive Decrees 73 and 274 of 2020.

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