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Latin America Investment News on Viva Tropical

Top Dollar to Those Who Rent Out Their Private Residence in Panama

Article Summary:

Renting homes for a few days as an alternative to traditional hotel accommodation for tourists is a growing trend all over the world and Panama is no exception. In Panama City, the phenomenon is also being driven by the widespread availability of unoccupied apartments which were bought by investors.

Photo Credit: PanamaRentals

Original Article Text From Prensa via Google Translate :

Rentals to illegal
he arrival of more tourists into Panamanian territory is generated friction.

It is assumed that entrepreneurs who are engaged in the activity must be living a honeymoon with the arrival of more visitors, but the party will be ruined with short stay rentals apartments in the capital city.

The business of the holiday has come spontaneously to the large number of apartments that were purchased to be resold later to twice its original price.

But the stagnation in sales of homes with high purchasing power has generated a parallel hotel business and not pay taxes.

On the Internet you can find announcements, including specialist sites which offers rentals for one night, and up to seven days.

Prices per night less than 100 dollars, well below the prices of most hotels on the seafront in the capital.

San Francisco, The Crab and Bella Vista are the points where most often offer apartments to tourists.

This business has nothing to do with the condo hotel scheme in which a person buys an apartment in a resort and has the option of the management company that includes the drive in your inventory. Then I recognized the owner a royalty for the lease.

Besides being unfair competition because these rentals do not pay the tourist tax which is 10%, industry representatives indicate that represent a danger, since there is no control over people entering a private tower apartments.

Currently the hotel industry is going through a slight narrowing of where the occupancy is below the levels recorded in 2011, partly because of an oversupply caused by the entry of new hotels.

From January to May occupancy fell by 9.8% when compared with the same timeline in 2011. And it is estimated that by the end of 2012 will be below 50%, when the end of 2011 was 70%.

The outlook is not encouraging based on the fact that today are under construction near 4 000 rooms will enter the market over the next two years.

“We must not only compete against ourselves but against this unfair practice that has pushed prices in the capital city down,” said Annette Cardenas, president of the Panamanian Chamber of Tourism.

This topic has been discussed with the authorities, there is even a proposal to include economic sanctions in the Bill which will amend the current tourism legislation.

Although not yet approved the final document, the draft would set penalties of up to $ 50 000. This would provide that contracts for apartments shall not be less than 30 days to avoid competition with the hotels.

Individuals or companies that are caught in this practice should pay the fine immediately, because the money would be used to pay for hosting the tourist who was offered the service.

Panama expects to receive about 2.5 million tourists in late 2012.

Link to Original Article:

From Prensa

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