How Much Tourist Spending Stays in Panama?

DAVID’S TAKE 

For decades, Panama has measured tourism development by the number of hotel rooms, but they leave an unanswered, more important question: how much of the money generated by tourism actually stays in Panama?

Cruise ships clearly illustrate this difference. A ship can disembark thousands of passengers for a few hours and set sail again that same afternoon.  Their accommodation and most of their meals are paid for on board. Their contribution is not equivalent to that of those who stay for several days, travel through different regions, sleep in hotels, and eat in local restaurants. A smaller number of visitors with longer stays can generate a greater economic impact and distribute it among more communities. Counting arrivals without considering these differences offers an incomplete picture of tourism.

How much of each dollar spent by visitors ultimately ends up outside the country. There is a huge difference between receiving $100 in tourist spending and ensuring that $20, $40, or $80 of that $100 continues to circulate within the national economy.

What happens outside the hotel also matters. In a secluded all-inclusive resort, visitors can spend their vacation without going to a local restaurant, shopping at a nearby store.  We must examine its links to the surrounding economy, rather than assuming that the arrival of tourists benefits everyone equally.

A small lodge in the countryside typically doesn’t need a complex corporate structure. It buys fruit and vegetables from nearby producers, hires local gardeners, cooks, waiters, drivers, and guides; uses local workshops and suppliers; and often, the owner lives in the country and reinvests profits there.

Tourism then becomes more than just a hotel room sold. It becomes a vast chain of small income streams distributed throughout the community.

There is also a benefit that rarely appears in investment figures: the possibility of earning a living without leaving one’s birthplace. When tourism offers stable jobs and opportunities for small businesses in rural areas, it can help young people find a future in their own communities and avoid migrating to already overcrowded urban centers. This sense of belonging also deserves consideration when evaluating a project’s value to the country.

Tourism is an extraordinarily labor-intensive activity.A guest needs someone to prepare their room, cook their food,  maintain the garden,  serve in the dining room, and manage the establishment.