Veronica Vallarino
It is no secret that Copa Airlines is moving to transform Panama into an air travel hub, with Tocumen SA working hard to keep up as it finalizes a much-needed expansion of the airport terminal. Much more will be required once Copa’s historic Boeing fleet purchase begins to arrive. The $6.6 billion contract signed in April for 61 jet planes signals that Copa’s aggressive expansion plans are in full swing, and will remain so for the medium term as the company adds more destinations to its already impressive roster. Veronica Vallarino* writes:
The deal bespeaks the important role the tourism sector plays in the country. It should also serve as a signal to the maritime industry to look beyond logistics and shipping. While these are key components to the nation’s growth, remaining competitive in world shipping and trade should not overshadow the potential growth market tourism can represent to the sector.
According to statistics released by Panama’s Tourism Authority (ATP) and the Ministry of Finance (MEF), since 2005 the tourism sector has steadily outpaced both the Panama Canal and the Colon Free Zone as contributors to the country’s Gross Domestic Product. For 2014 tourists arriving in Panama spent about $5.48 billion, contributing a staggering 11.9% of the total GDP.
Visitors to Panama last year totaled 2, 304, 711 travelers. They are a key factor generating employment and growth for businesses, large and small. Yet most of these visitors arrive each year by plane. This represents an opportunity for those involved in the cruising and yachting industries. The country’s maritime world can play a key role in increasing the number of visitors to Panama and tap into the wealth of capital these travelers bring.
Colon – picture credits Roger Wollstadt
The Colon Free Port Project
The Panama government is already taking the lead to increase the numbers of visitors entering the country by cruise ship. The Varela administration has earmarked $600 million for infrastructural improvements to the city of Colon on Panama’s Caribbean coast. The plan calls for investing in new roads, housing and other projects. The economic windfall is expected to have positive repercussions across that province, but residents will not be the only ones to benefit.
Recognizing the vast spending power that cruise ship travelers leverage is one of the motivating factors behind this strategy, as it also contemplates extending the tax-free status outside of the borders of the Free Zone commercial enclave such that visitors can debark to make duty free purchases and perhaps even be enticed to stay.
Capturing the cruise ship market is the reason for success of world-class travel destinations such as the Bahamas or Cozumel, Mexico, two of the busiest ports-of-call for cruise ships in the Caribbean. These port/resort towns, and many others, have built up around the tourist trade. According to OneCaribbean.org, the Bahamas received upwards of 4, 700, 000 tourists in 2013. Cozumel, Mexico received upwards of 2, 750, 000 visitors. By comparison, the entire country of Panama receives less than 3 million visitors a year. Of the total travelers arriving in Panama until July this year, only 12% entered by way of cruise ship. The numbers this year are faring worse than the year before, with current projections showing a 19% reduction in cruise ship arrivals to Panama to date as compared to 2014. Thankfully, the Panama government is moving to change this.
Tourists arriving at the Colon 2000 cruise port – picture credits ATP
Cozying up to the cruise lines
Just last month, ATP Director, Gustavo Him, met with representatives of Royal Caribbean y Carnival Cruises, the top two cruise ship operators in the world based on their number of fleet, to discuss the country’s plans to become a cruise ship homeport. According to the ATP’s analysis, a 2, 500 passenger cruise ship which docks at a homeport will generate on average 125, 000 additional tourists to that destination per year, where they will stay an average of one to three additional days either before or after their cruise. Panama can and should try to approximate the number of Cozumel’s cruise ship travelers, but it is clear that the potential of this market needs a lot to be developed.
Major influx of capital to back the creation of port areas on both coasts capable of accommodate anchorage for major cruise ship lines would be a great boon to the country, but the success of this strategy requires the expertise of the maritime industry. As with the Canal Expansion, a partnership between Panama’s government (contractual oversight, customs and immigration regulations, marketing and promotion) and private enterprise, led by the local maritime industry, would be needed.
The political leadership is already in place with the Varela administration setting the stage by fighting corruption across the board, an important factor for Panama to be considered seriously on the world stage and to prevent the level of skimming that could potentially take place with large-scale construction projects that lack the proper controls.
What is taking place in Colon is a crucial first step since that city represents the first obvious location for its existing piers and its proximity to the Caribbean cruise ship traffic. The ports of Colon 2000 and Cristobal require an expansion if they are to compete with ports-of-call like San Juan, Puerto Rico where four cruise ships can dock at once.
Panama’s Pacific side has challenges of its own. Drastic tide levels make the construction of a port a more difficult prospect, but one that can be reached through ingenious design and effort. Already down the line, various multinationals are looking at the defunct port of Aguadulce in the province of Cocle on Panama’s Pacific coast, where many commercial interests have sights on creating a container port. Though the Aguadulce port project is banking on increasing agricultural exports and reducing container transportation time along the Interamerican highway, it is not difficult to imagination that the same port can be readied as a future cruise ship dock. It is, after all, near the country’s most visited beaches.
The place with the most potential as a location for a future cruise ship port might just be Bocas del Toro, on Panama’s Caribbean bordering with Costa Rica. With its picture postcard setting, this area, so coveted by international travelers, has all the right ingredients to make it an ideal cruise ship destination, with much to offer in terms of natural beauty and all the activities that go along with it.
Marinas and the world of yachting
Developers in Panama also recognize the importance of Panama as a destination for boaters worldwide. Over the last few years, great strides have been made to develop strategically located marinas to grow this important market segment.
The Amador Causeway is where one of the country’s most visible and well-known marinas is located. At the Pacific entrance to the Panama Canal, the Flamenco Marina has attracted the attention of the largest boat show operator in the world, Show Management, which has for two years running hosted the Panama International Boat Show there.
Located in Nombre de Dios in Colon is Turtle Cay Marina, operated by Joaquin Vallarino IV. The eco-friendly development comprises luxury beach homes surrounded by a lush, tropical marine environment, where yachting, diving and sports fishing are a way of life.
Discovered by well-known Panamanian businessman, J.J. Vallarino, a sailor with vast experience, the tucked away marina is accessible by a 10-ft. canal and provides natural shelter, protected by coral reefs and mountainous terrain. It has 70 fully functional slips of up to 120-ft. with 100 amp pedestals for yachts, sailboats and catamarans.
The idyllic setting features panoramic vistas where the beautiful virgin beaches of the Panamanian Caribbean beckon. The world-famous San Blas islands are only 30 miles away. Ancillary services include fresh water, free Wi-Fi, a fuel dock, haul out area, yacht club, beach bar, restaurant, laundry room, bathrooms, taxi service and 24-hour security. A master plan development covering 200 hectares, Turtle Cay offers beachfront or marina front lots with three customizable model homes to choose from.
Ultimately, for boating marinas and cruise ship ports to work, activities and services for tourists who arrive by sea must exist. One way to appeal to the cruise ship traveler is by creating incentives such as is contemplated by the Colon Free Port plan. Boaters have different needs, which places like Turtle Cay Marina cater to. Meeting the demands of these travelers generates interest in arriving to the Isthmus to discover the magic of Panama’s raw wilderness, one of the last few existing in the world. Blessed with two oceans, the country will continue to grow as a travel destination, and its marine services industry will play an increasingly important role in contributing to the nation’s bottom line.
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*Amongst other credentials and expertise, Ms Vallarino is an expert in Commercial Shipping International Markets. She recommended and developed new markets for the shipping and commercial sector in Panama. Acted as a Head of the Consulate and Commercial office of Panama in London. Managed several activities including registration of ships under Panama Flag. Collaboratively worked with the ministry in the follow-up and implementation of treaties. Managed a Dossier of 150 investment business projects. Actively participated with the team in performing analysis of key economic and political issues. Accountable for performing market research and presentations to identify key opportunities for the Panamanian industrial sector in European Markets.
