Panama’s Experiencing A Short-Term Rental Boom

Liz LarroquetteAugust 19, 2024

According to the latest glossy Conde Nast Traveler issue, “Panama Is Ready For Its Close-Up”! The magazine’s audience is upscale and well-respected by serious travelers globally. Along with that headline, the three-page spread discusses how Panama has gone “from merely a stopover to a bona fide stay.”

Conde Nast encourages readers to join the locals by dancing and participating in the lively jazz scene at Salotto Italiano.

“Restaurant openings are showcasing Panama’s diversity and culinary flair. Getting there…is easier than ever thanks to new flights on hometown carrier Copa Airlines and stops by cruise lines, including Norwegian, Crystal, and Oceania at the recently expanded Fuerte Amador terminal,” Conde Nast reasoned why tourists are flocking to Panama.

High-End Hotels Are Rapidly Opening New Facilities

Many upscale hotels, such as the Sofitel Legend, The American Trade Hotel, and Hotel La Compania, have opened luxury options in the last few years in Casco Viejo, Panama’s urban tourist center. La Compañía, the site of an 18th-century Jesuit monastery, has recently expanded its original footprint to include a restored four-story mansion with a restaurant, art gallery, speakeasy, and a cigar bar. High demand speaks loudly.

While travelers still prefer hotels—both luxury and budget—condo hotels are gaining market share. The short-term rental market is expected to grow from $112.31 billion in 2023 to $315.18 billion by 2033, with a compound annual growth rate (CAGR) of 10.87% from 2024 to 2033.

Travelers reported they prefer hotels because of the consistency of major brands and the perception of cleanliness and quality. They see hotels as having more amenities, including pools, gymnasiums, on-site dining options, and concierge services. Hotels are viewed as physically being located in safer, more convenient locations.

Travelers who choose to stay in a short-term home rental often do so because they want or need a kitchen, more space, and a price perceived as more affordable. They report “compromising” to get those options and would like a better (safer) location, amenities, and easy check-in and check-out.

Panama Listed As A Hot Tourism Location

Forbes, a global media company focusing on business, investing, technology, entrepreneurship, leadership, and lifestyle, predicts Panama will be one area with an explosion in condo hotel traffic.

The Gamboa Rainforest Resort is part of the Bern Hotel collection and provides access to the Panama Canal, gondola trips through the rainforest, and boat trips to visit the Howler monkeys and three-toed sloths. It’s also great for a day relaxing by the pool.

Empresas Bern, the most recognized construction, hotel, and tourism company in Panama, has fully embraced the condo hotel market by utilizing market research and their years of managing nine local hotels and resorts, including The Westin Resort at Playa Bonita, the Intercontinental Panama, Gamboa Resort at the Panama Canal and Le Méridien Panama.

With four condo hotel projects currently offered by Bern, most of the reasons travelers choose hotels over condo hotels have been addressed. More space, full kitchens, hotel amenities (pool, business centers, social areas), brand standards, front-office and housekeeping employees, on-site restaurants, bars, retailers, and coffee shops.

The most critical issue, location, has also been solved by placing all four projects in some of the best tourism areas in Costa del Este, Panama City (two), and Boquete. Additionally, Roche Bobois, a European company specializing in fast-forward furniture design, will fully furnish the units before delivery.

Ubers are inexpensive, and drivers prefer picking up at a known site, which is attractive to renters. The projects offer a property management system with check-in and check-out, and two include on-site medical services. These projects have the same Return on Investment (ROI) predicted by real estate investment experts–8 to 11%.

Uptown Will Be A Commanding Tower

Uptown is one of the more exciting projects since it is located in the Calle Uruguay area of Panama City and steps from Avenida Balboa. The area is a fully revitalized section of Panama City that was developed as an entertainment and shopping district with restaurants, curated boutiques, branded retail, bars, jazz clubs, and coffee shops. It is also an easy stop for tour companies and Uber drivers and a short walk to Panama’s metro, subway, and bus lines.

Uptown units begin at $302,000 for 764-1453-square-foot offerings. HOAs are $4.00 per square meter, and the project is scheduled for completion in late 2027.

Generation Tower Is Geared to ALL Generations

Generation Tower appeals to the single executive transferred or working periodically from a regional headquarters of over 120 foreign companies in the upscale business district of Costa del Este. It is also attractive to the tourism crowd, who may enjoy luxury hotel amenities such as retail, on-site restaurants, regular housekeeping, pools, social areas, a business center, and a theatre. The Costa del Este Hospital affiliated with Johns Hopkins Medicine, is within walking distance.

Generation Tower will offer short-term renters more amenities than a traditional hotel and will accommodate the needs of all generations. It will include four floors of independent living, retiree social programs, easy parking and restaurants, easy access to green space and the central park, full-time employees covering check-in and check-out, housekeeping, and health care support, and fully furnished units with on-site hotel management.

Generation Tower will also welcome full-time residents as one tower will be designated for individuals living in Panama City year-round.

Less Expensive Independent Living In A Tropical Paradise

The unique section of Generation Tower, which is almost sold out, is the four floors, which provide Independent Living accommodations within the condo hotel parameters. Nursing stations will be located on each floor, doorways will accommodate wheelchairs, and communication will be easily transferred directly to medical personnel. These units have access to food services and facilitate finding care workers independently.

The price for Generation Tower begins at $217,000; developer financing is available, and HOAs are $3.50 per square meter. All units have full kitchens and are delivered fully furnished. Units are compact, functional, and attractive, offering 462 to 699 square feet.

Seaside House Is a Unicorn

Renters at Seaside House will enjoy checking into a beautiful lobby with full-time management and security. Residents will enjoy the ease of living in an upscale location, steps from Panama Bay and the Cinta Costera.

An excellent price and prime location, just off Avenida Balboa, make Seaside units very attractive to both short—and long-term renters and full-time residents. This new development will be part of the existing dynamic Calle Uruguay section of downtown Panama City.

Because of its prime location, Seaside House offers renters and residents easy access to supermarkets, banks, pharmacies, restaurants, the Cinta Costera overlooking Panama Bay and shopping.

Condos range from 602 to 689 square feet and come in one-bedroom floor plans, some convertible to two. All units come fully furnished and have high-end finishes with access to three floors of amenities such as a pool with a Jacuzzi, an exclusive social area, and even a dog park. The project has the license for short and long term rentals. Prices range from just $232,400 fully furnished turnkey and rental ready.

Leave The City With A Condo Hotel Project In Boquete

Currently under construction and ready for delivery in Mid-2025, Pinoalto is a stunning project in the beautiful area of Boquete, located near the Costa Rican border. It is a departure for Empresas Bern, which has been building exclusively in greater Panama City for 46 years.

The Pinoalto project is located within the Boquete Country Club and enjoys all the amenities, including a Recreational Center with a pool, Jacuzzi, gymnasium, tennis courts, social areas, and an Equestrian Center for horseback and trail riding.

Boquete has long been a favorite of retirees seeking year-round spring-like weather, a robust expat community, and a constant supply of fresh vegetables, fish, meats, and European-style bread. Nestled between the Caribbean and the Pacific Ocean, the area welcomes visitors worldwide who enjoy various watersports (surfing anyone?), sport fishing, eco-tourism, stunning flowers, and some of the best coffee globally.

Pinoalto will attract both full-time residents and renters with its reception and concierge services, social areas, location next to a river canyon, and high elevation of approximately 3,500 feet. A walk-in medical station is part of the project.

Prices start at $332,000, and the residences will be 1022 to 1602 square feet. Developer financing is available, and the HOAs are $2.50 per square meter. This area has been without adequate housing or rentals for decades; consequently, the Pinoalto project has been one of Bern’s fastest-selling projects.

Panama’s Time To Shine!

Cruise ships pass through the Panama Canal almost every day, and for many, the experience is one of a lifetime. Since ships carrying passengers pay a fee for each “body in a bed,” cruise ships may pay close to a million dollars to traverse the waterway, as opposed to an average of $450,000 for cargo ships.

It’s truly an exciting time in Panama, with cruise ships docking at the newly completed pier in downtown Panama City. Itineraries have both day trips and beginning and ending offerings. Previously, passengers could only make a quick stop in Colon after going through the Panama Canal. Now, pre- and post-packages encourage people to stay a little longer in Panama City.

The new Panama City Convention Center attracts up to 20,000 visitors a day who look to enjoy the condo hotel offerings. Panama’s hometown airline, Copa, has direct flights to 87 international cities. Copa also has a program that allows visitors to stay nights in Panama City before continuing their trip.

The current offerings of condo hotels are both exciting and serious for the investor and resident. These well-positioned projects allow individuals to build equity for long-term real estate portfolios. I’d love to discuss the options and how we can create a package that fits your individual needs. Just call, email or text me however you like to communicate; I’d love to have a chat.