Published on and written by Cyril Jarnias
Acquiring a hotel in Panama represents an attractive opportunity for investors seeking to diversify their portfolio in a country with growing tourism. Renowned for its tropical climate and biodiversity, Panama attracts numerous visitors each year, creating a favorable market for hotel development.
Before committing to this investment, it is essential to follow a comprehensive checklist to ensure the success of this venture. From evaluating economic potential to understanding local regulations, and selecting the ideal location, each step is crucial to guaranteeing a safe and profitable investment.
Overview of the Hotel Market in Panama
The recent evolution of the Panamanian hotel sector is marked by a notable increase in tourist arrivals, although hotel occupancy rates remain moderate. In 2024, the country welcomed approximately 2.78 million international travelers, including 2.1 million tourists (+12% compared to the previous year). Tourism revenue reached a record USD 6 billion in 2024, a 10% increase year-over-year. However, the hotel occupancy rate stabilized around 51% over the same period.
Current Trends and Market Evolution
- Visitors are increasingly seeking authentic and personalized experiences: a rise in boutique hotels, ecolodges, and accommodations focused on sustainable development.
- The business/conference segment is growing thanks to the appeal of the Panama Convention Center; for 2025–2026, over 70 major events are already confirmed.
- Demand continues to grow in the “nature” (ecotourism) and cultural niches.
| Indicator | Value/Recent Evolution |
|---|---|
| International Arrivals (2024) | ~2.78 million |
| Hotel Occupancy Rate | ~51% |
| Tourism Spending (2024) | USD 6 Billion (+10%) |
| Expected Tourism Growth | +8–12% per year until 2025 |
Economic and Political Impact
Sector performance benefits from:
- Relative macroeconomic stability
- Proactive policies to attract foreign investors (tax incentives)
- Ongoing efforts to position Panama as a regional logistics and events hub
However, rapid growth has not yet allowed for the full absorption of capacity created in recent years; competition remains strong between classic establishments, new urban concepts, and ecological ones.
Key Tourist Destinations & Investment Opportunities
Areas where hotel investment is considered particularly promising:
Panama City
- Nerve center for business/tourism
- Proximity to Canal/Panama Convention Center
Bocas del Toro
- Internationally recognized nature/beach destination
- High seasonal demand
Boquete & Chiriquí Highlands
- Ecotourism/mountain/agritourism booming
San Blas/Guna Yala
- Indigenous community tourism/upscale beach relaxation
Current Competition & Project Pipeline
The Panamanian market has several hundred operational hotels – with a continuous upscaling towards the boutique/luxury/ecological segments. Several major projects are also announced or under construction in the main urban/coastal tourist hubs.
- Currently operating hotels: several hundred (mainly in Panama City)
Notable Projects:
- Extensions/renovations in the capital
- New eco-tourism units outside traditional areas
- Increased investments around the Canal / Miraflores Visitor Center
Future Outlook
The sector is expected to continue its progress thanks to:
Favorable External Factors:
- New infrastructure: expansion of the road/airport network; urban modernization around the canal
- Government incentives: tax exemptions targeting hotel/tourism investment
- Rise of major international events generating constant additional flows
The hotel market in Panama thus presents solid but competitive potential, driven by product/service innovation and supported by a dynamic economic environment. Future opportunities will depend closely on adapting to new international customer expectations and the successful integration of local natural/cultural assets.
Good to Know:
The hotel market in Panama has experienced dynamic growth in recent years, supported by an increase in tourism demand, with an occupancy rate averaging 67% in 2022. Recent economic developments, including the expansion of the Panama Canal, as well as government incentives such as tax exemptions for new hotels, have encouraged investments in the sector. Panama City, Bocas del Toro, and Boquete are among the most sought-after destinations for hotel investments, due to their growing tourist popularity. Currently, the country has approximately 2,000 operating hotels, with several projects under development, which increases competition but also opportunities. With government plans to improve infrastructure and promote tourism, the Panamanian market offers interesting future prospects for investors, particularly in light of emerging tourist destinations and the continuous increase in international arrivals.
Steps to Acquire a Hotel in Panama
Essential steps to acquire a hotel in Panama:
1. Conduct a Preliminary Market Study
- Analysis of the local tourism sector, occupancy rate, competition, and potential profitability.
- Assessment of project viability based on hotel type, location, and target customer profile.
- This step helps identify opportunities, risks, and the operating strategy to adopt.
2. Search for Hotels for Sale
- Consultation of specialized commercial real estate portals, local real estate agencies, and international platforms.
- Collaboration with experienced and reputable real estate agents who have a good knowledge of the Panamanian hotel market.
- Participation in professional networks, real estate fairs, or direct contact with owners.
| Where to Look? | Professionals to Consult |
|---|---|
| Local Real Estate Agencies | Real Estate Agents |
| Online Platforms (e.g., MLS, specialized portals) | Real Estate Attorneys |
| Professional Networks | Local Accountants |
| Classified Ads in Specialized Press |
3. Legal and Administrative Procedures
- Verification of the property title and possession rights by a specialized attorney.
- Signing of a promise-to-purchase contract (“Promesa de Compraventa”) setting the sale conditions.
- Obtaining and verifying essential documents: valid passport, proof of funds, property title, tax clearance certificate, etc.
- Translation of all foreign documents into Spanish by a sworn translator.
- Signing of the final deed of sale before a notary, then registration of the property transfer at the Public Registry of Panama.
- If necessary, application for a residence permit or investor visa (optional but advantageous depending on the amount invested).
4. Tax Procedures and Obligations
- Analysis of the tax implications of the acquisition: property tax, taxes on rental income, potential VAT, etc.
- Verification of the seller’s tax compliance (tax clearance certificate).
- Advice: work with a local accountant to optimize the acquisition structure and tax management of the hotel.
5. Due Diligence
- Complete audit of the hotel: verification of financial statements, operating licenses, employment contracts, compliance with health and safety standards.
- Analysis of debts, potential litigation, charges, or mortgages registered on the property.
- Technical assessment of the building and estimation of required renovations.
6. Support from Professionals
- Close collaboration with Panamanian attorneys specialized in real estate for drafting and reviewing contracts.
- Use of an accountant to evaluate profitability, tax risks, and investment structuring.
- Assistance from a real estate agent for negotiation and securing the transaction.
Good to Know:
To acquire a hotel in Panama, start with a market study to evaluate the potential profitability of your investment, considering location, competition, and target audience. Actively search for hotels for sale through specialized websites, local real estate agents, or attorneys, who can provide access to exclusive listings. Ensure you understand the legal implications, including obtaining a residence permit if required, and the procedures necessary to register the property. It is vital to examine the specific tax considerations in Panama and conduct an exhaustive due diligence to leave no room for uncertainty. Collaborating with experienced Panamanian attorneys and accountants is essential to navigate local legislation and ensure compliance with current laws.
Key Takeaway:
It is imperative to surround your project with a multidisciplinary local team (attorney, accountant, real estate agent) to secure each step, ensure legal compliance, optimize taxation, and guarantee the success of your hotel investment in Panama.
Due Diligence: Ensuring a Secure Investment
Due diligence is a crucial step when buying a hotel in Panama, as it secures the investment by identifying and limiting financial, legal, and operational risks. A rigorous analysis significantly reduces the likelihood of unpleasant surprises after the acquisition and protects the investor from major losses or future litigation.
Main Steps of Due Diligence When Buying a Hotel in Panama:
- Financial Analysis of the Hotel
- Study of balance sheets, income statements, and cash flow over several years.
- Verification of revenue and expense consistency, identification of abnormal trends or hidden debts.
- Assessment of actual profitability compared to hotel industry standards.
- Examination of Property Titles
- Verification of the validity and clarity of the property title (absence of litigation, mortgages, or undisclosed charges).
- Consultation of the public registry to ensure the seller’s legitimacy.
- Obtaining a tax clearance certificate to ensure all taxes and charges are paid.
- Assessment of Compliance with Local Regulations
- Check of hotel operating permits, zoning certificates, compliance with safety and accessibility standards.
- Verification of compliance with local tax and social obligations.
- Assessment of Environmental Risks
- Identification of soil pollution, natural hazards, or specific environmental constraints.
- Verification of the absence of litigation related to environmental protection.
Collaboration with Local Experts:
- Attorneys Specialized in Panamanian Real Estate Law
- Secure the examination of property titles and contract drafting.
- Manage the official translation of foreign documents.
- Local Accountants
- Verify the accuracy of financial statements and identify tax or social risks.
- Technical and Environmental Experts
- Conduct technical and environmental audits to anticipate hidden costs.
Practical Tips for Identifying Red Flags:
- Inconsistencies in financial statements or lack of accounting documentation.
- Charges or mortgages not mentioned on the property title.
- Current or past litigation on the property.
- Missing or irregular operating permits.
- Undeclared renovations or lack of compliance with safety standards.
- Seller’s refusal to provide required documents or cooperate with your experts.
| Due Diligence Step | Main Objective | Critical Red Flag |
|---|---|---|
| Financial Analysis | Assess actual profitability | Unstable revenue, hidden debts |
| Examination of Property Titles | Secure ownership and absence of litigation | Mortgages, litigation, unclear titles |
| Regulatory Compliance | Compliance with local laws | Missing permits, administrative disputes |
| Environmental Risks | Anticipate environmental costs | Pollution, undisclosed restrictions |
Impact of Rigorous Due Diligence:
- Significantly reduces the risk of legal disputes or financial losses.
- Allows for adjusting the acquisition price based on identified risks.
- Strengthens the ability to negotiate and secure the transaction long-term.
Good to Know:
Due diligence is crucial for securing the purchase of a hotel in Panama, ensuring a thorough evaluation before investment. Key steps include the financial analysis of the hotel, essential for understanding profitability and detecting any accounting anomalies. The examination of property titles verifies the legal rights of sale to avoid litigation. Also ensure the assessment of compliance with local regulations, which identifies and rectifies potential violations. Special attention to environmental risks helps avoid unforeseen compliance costs. Collaborating with local experts, such as attorneys and accountants, facilitates the process thanks to their knowledge of the Panamanian market. Be alert to red flags, such as ongoing litigation or a unclear financial history, which could harm your investment. Finally, rigorous due diligence significantly reduces financial and legal risks, ensuring a prosperous and secure hotel investment.
Tip:
Never invest without first obtaining the opinion of a local attorney and an independent accountant on the property and operation of the hotel.
Thorough due diligence is the best guarantee of a successful and secure hotel investment in Panama.
Tourism Overview in Panama
Panama is experiencing notable tourism growth, with an 11.8% increase in international arrivals at the beginning of 2024. The country mainly attracts visitors from North America (38.6%), South America (37%), Europe (15.4%), and Central America (8.8%). The average length of stay is 8.5 days, with an average expenditure of 1,787 balboas per visitor.
Annual Number of International Visitors
- Over 2 million international tourists are welcomed each year.
- The high season periods correspond to the dry season, from December to April, and major festivals like Carnival, where hotels are fully booked.
Main Visited Places and Influence on the Local Economy
| Place/Attraction | Description & Economic Impact |
|---|---|
| Panama Canal | Generates significant tourism revenue and attracts visitors from around the world. |
| Bocas del Toro | Archipelago renowned for its beaches, attracts nature and leisure enthusiasts, boosts the local economy through hotels and restaurants. |
| Playa Blanca | Popular beach resorts, development of luxury hotel infrastructure, creation of local jobs. |
| Casco Viejo | UNESCO World Heritage historic district, major cultural hub, driver of restaurants and urban tourism. |
Other sites like Boquete (mountains and coffee), the San Blas Islands (Guna Yala culture), or Portobelo (colonial fortifications) complete this diverse offering.
Impact on the Hotel Sector and Opportunities for Investors
- High demand for accommodation, especially during high season and major cultural events.
- Investments in the hotel industry are growing, supported by the country’s stability and the dynamism of the tourism sector.
- Notable opportunities in beach areas and historic districts where demand remains high.
- Luxury and boutique hotels see their occupancy rates increase, strengthening the appeal for investors.
Government Efforts for Sustainable Tourism and Infrastructure Improvement
- Panama is focusing on sustainable tourism, promoting ecological initiatives in protected areas and local communities.
- Development of modern tourism infrastructure, notably the Panama Convention Center, to attract business tourism and conferences.
- Strengthening security in tourist areas, creation of tourist police and increased patrols.
- Improvement of road access, regional airports, and internal transport to facilitate visitor travel.
Main Festivals and Events Attracting Tourists
- Panama Carnival: major national celebration, significant economic impact on hotels and restaurants.
- Corpus Christi in La Villa de Los Santos: promotion of intangible heritage.
- Festival de la Pollera and Manito de Ocú: promotion of local traditions, boosting rural tourism.
In summary:
Tourism in Panama, rapidly expanding, represents a major lever for the economy, stimulating the growth of the hotel sector and offering concrete opportunities for investors, while moving towards more sustainable and inclusive development.
Good to Know:
Panama attracts approximately 2.5 million international visitors per year, mainly during the high season, from December to April. Tourists focus on must-sees like the Panama Canal, the paradisiacal beaches of Bocas del Toro and the beach resorts of Playa Blanca, as well as Casco Viejo in Panama City, a UNESCO World Heritage historic site. This tourist flow contributes significantly to the local economy, representing 10% of the national GDP. The hotel industry is booming, offering promising opportunities for investors looking to buy a hotel, especially given the growing demand for eco-friendly stays. The Panamanian government is investing in sustainable tourism, developing eco-compatible infrastructure and launching initiatives to preserve the environment while enriching the tourist experience.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
