Panama’s Minister of Tourism, Ruben Blades

Actor/Singer and Politician Ruben Blades recently replied to an article I wrote on Panama’s tourism industry. To anyone familiar with my writing, public speeches and opinions, these ideas are not new. Apparently however, both my ideas and persona are unfamiliar to Mr. Blades. Puzzling, given that he has met me on several occasions, I have written very public letters to him, and that my travel agency is among the few operating in Panama’s relatively small tourism sector. I’ll give him a pass, however, given that I generally fly below the radar in Panama. I also realize Ruben is a busy man with a long contact list.

As to my actual words, I didn’t think they were terribly critical of Panama. Nor did I intend to dismiss the gains that Mr. Blades’ IPAT administration has been able to accomplish. I was merely offering my thoughts on the “tourism sins” that Panama, or any tourism destination for that matter, must avoid for long-term success. We do seem to disagree on several key points, so I’d like to address those here. I’ve posted Ruben’s reply in italics and my counter-comments below.

MR. BLADES’ ANSWER TO THE ARTICLE

We would like to respond to comments made by Halloranc in his blog titled, Panama’s Five Deadly Tourism Sins, published recently.

1. “Halloranc” states; “Panamá has little history of tourism success”.

His point of view is far from truth. Back in the 17th Century the Portobelo Fair attracted over 60,000 people from all over the world to trade and visit Panamá, every year. In the second half of the 20th century, except for the years of political instability brought on by Noriega´s regime, Panamá had a higher tourist/visitor rates than Costa Rica or any Central American destination. There was a well planned international promotion (My Name is Panama) that catched tourists and visitors attention and many others were attracted to Panamá´s importance as a business destination due to its Banking Center, the Canal and the Free Zone.

Mr. Blades, here’s where I must respectfully disagree. On your point of the Portobelo Fair, I suppose I should have been more clear and stated, “little tourism success since the bronze age.” Calling back to the days of Conquistadors doesn’t have much bearing on the current discourse. Despite your impressive resume in multiple arenas Mr. Blades, I would contend that I have a deeper understanding of the direct comparisons between Costa Rica and Panama tourism.

While my girlfriend would probably disagree, I’m not much for horn-tooting. But to qualify my statements, I should be clear that I have earned a living in tourism in Central America for a decade. During that time I’ve consulted to dozens of hotels and real estate projects. Today, the Costa Rica travel agency I co-founded is among the largest in the country. In what has to date been a labor of love, I opened our Panama travel division three years ago. Today, I divide my time between the two neighboring nations. So I state with confidence: There is simply NO COMPARISON between Panama’s tourism growth and that of Costa Rica.

As politicians often do, one can bend statistics as many ways as you’d like. But there’s a simpler test: There are hundreds of successful, expensive, boutique hotels in Costa Rica. A half dozen more ultra high-end, small scale brands are under construction. 95% of these properties are outside the capital city of San Jose. It would be difficult for me to make a list of just my top 10 favorite. On the other hand, can you even NAME 10, first-class hotels outside Panama City? I sure can’t.

Mr. Blades, how many trips have you made to Costa Rica during your term to understand Panama’s near-peer competitor?  Please be my guest! I will give you a guided tour to show you the good, bad and ugly of Costa Rica tourism.

2. “Halloranc” states: “Panamá has no clear plan for success”.

False. Panamá had a Plan for Tourism Development (1992-2002) that created a paradigm for development of the industry. The problem was not the lack of a Plan; the problem has been a lack of political WILL, no clearly designed purpose and course of action, and very little enthusiasm from the private sector to implement the Plan. Currently, we are in the final stage of completing a new Master Plan, a national strategy for the development of sustainable tourism in Panama. This Plan will have regulations which will define the intent and direction of our national tourist development, the priorities and schedules for its creation, and it will identify the areas and businesses that will be allowed to be developed, to fulfill the quota of jobs expected to be created.

I think the development of this “Master Plan” is great in theory. But why has this process been such a closed-door affair? Why not solicit involvement from business owners and investors currently IN the industry? Wouldn’t it be wise to ask our opinions, identify our needs and hear our challenges? I know at least a dozen successful hoteliers and tour operators in Costa Rica residing in Panama (because we prefer it here) who are surprised by the difficulties of working within the local system. Where is their forum? Is this input from industry veterans not valued by IPAT?

I agree Mr. Blades, you must have the political will and a supportive reining party to get your policies approved, but wouldn’t it help to ALSO have a supportive group of business owners and investors behind your proposed Master Plan?

3. ”Halloranc” states, “Hyper growth, Rushing into mistakes”,

as a “source of concern over the disappearance of areas of tourist potential, being overrun” by un-checked development. From our perspective, it is correct to be concerned over how past governments created laws without appropriate reglaments, or allowed unconsulted laws produce undesired consecuences, or permitted these laws to be applied with no official supervision, or allowed impunity for their violation, or laws that created conflicting jurisdictions, etc. The Master Plan now in process will determine what needs to be done, from now on, to prevent a repetition of any past disorder. It is pointless to continue to dwell on the past. The responsibility for what we lament today goes to the private sector, where speculators, with no regard for the consecuences of their greed, actually have prevented responsible investment from taking place, and the public sector whose lack of enforcement of existing laws and neglect of duties has created doubt and confusion, all around.

Everybody is aware of the problems of hyper growth. Panamá is in the process of modernizing its institutions, so as to legally face its regulatory responsibilities, without creating concern over legal security issues, (”Seguridad Jurídica”). Rest assured “Mr. Halloranc” that in the National Plan for the Development of Tourism the adequate controls will be placed in position to prevent the creation of Panamanian versions of Cancún-type tourism, or Marbella-like residential Mega developments. Of course, you have to expect the private sector not to like this. I would love to see what your Blog will write when the get-rich-quick-and-easy-crowd begins to denounce the order brought in by our government as “Socialist”, or “Communist”, or, “hostile to investors”.

Also, please note the difference between real estate developments and tourism development. Hotels are not the ones creating the enormous pressure on land use, affecting the general environment and creating the loss of aesthetic values we experiment today in Panamá, nor is the government the one selling the beautiful homes in Bella Vista to being torn down in order to build residential towers; it is the private sector. Why do people sell their beautiful old homes, to be razed? Because they can! Because they make a lot of money! Because it´s a free country! Does it bother us? I don´t think the sellers care. Can it be stopped ? No, but we can write blogs about it.

Sr. Reuben, here’s where I think you and I agree more than we do not. I state, without apologies to Balbina, that I’m a capitalist pig. I am a free market advocate and believe that more often than not, governments screw things up. However, I do believe it is the job of the governing bodies to ensure that the long-term interests of its people are protected. That means that lawmakers require that businesses operate in an ethical manner. As that relates to land development, the Panamanian government must create and enforce environmental and zoning laws that foster smart growth.

Panama must look to Costa Rica and other eco-friendly nations with more experience in coastal and eco-development, learn from and IMPROVE upon their policies. This is the only way I know of to prevent dense beach front development and rain forest clear cutting. As one example, in what has been a highly successful program, Costa Rica actually PAYS land owners to not cut their timber. Sure beats tending cattle!

Where we don’t seem to agree Mr. Blades is that real estate development requires a distinct discussion from tourism development. I argue that real estate and tourism MUST go hand in hand for long-term, sustainable success. I won’t go into the “residential tourism” debate here, but great residential resort development (see: Four Seasons Costa Rica) generally includes short-term (hotels) mid-term (condos) and long-term (houses, fractional) REAL ESTATE. It’s all the same thing…we just have different names for it. People sleep in a bed and call the place home, but for varying periods of time. Some even stay for a while, maybe even months! But if it’s not their principal residence, it’s STILL TOURISM-RELATED.

What Panama must do VERY soon is implement policies to guarantee that the best properties aren’t squandered on projects that are exclusively for residential real estate.  Some suggestions:

1. Require projects situated in prime tourism locations and over a certain size (50 hectares?) to dedicate a % of land to hotels and non-residential real estate
2. Limit maximum footprint and height for projects within 200 meters of high tide

Panama desperately needs smart policies to delay what I see as ridiculous run up in coastal prices. Otherwise, sky high land costs will lock out mid-size hoteliers and require equally sky-high construction. Why are prices so rising so high, so quickly?  For now, while the government has been slow to pass any sort of land use regulations, it is still POSSIBLE for developers to build multi-story condo towers on every inch of coast. Naturally that’s exactly what nearly all the developers have planned. My fear is that the long-term value of these destinations could plummet. As Panama begins to resemble like every other condo-infested beach, from Mexico to Miami Beach, how can it differentiate itself to the consumer?

Mr. Blades, do I really sound like a whining, money-hungry, foreign intruder here?

So as not to bore you, I’ve posted another article specific to Tourism Laws Panama Should Pass (and enforce) For Sustainable Development. You can blame the private sector all you’d like Mr. Blades, but business is by its very nature a remorseless eating machine. It has but one prerogative: make buckets of money. It is the failing of this government to impose laws that inhibit “get rich quick” development in Panama. You cannot expect land developers to follow rules unless you enforce them, without exception.

I realize it is mighty tempting for some of the Diputados and other officials lording over juicy beach front real estate to accept some coima (bribes) from mega-projects that want to write their own rules. This is EXACTLY what Panama must avoid. Do NOT sell your soul to cookie-cutter all-exclusive resorts! I’ve seen what these operators do in Costa Rica, like the “Grand Poopagayo” debacle of a few months back.

4. “Halloranc” states “Copy-cat-itis brings loss of culture”.

We agree it could. Then again, I copied PuertoRican singers when I started singing but didn´t change my nationality because of it. However, “copy-cat-itis” also can produce a loss of potential business and make Panamá less competitive, internationally. The private sector should read and react to this comment by Halloranc. The private sector is the one responsible for creating tourists products. I guess the blogger´s concern is directed to those offering products for tourist enjoyment. As for the cultural value of our country; it is one of our strenghts. For instance, there are no surviving indigenous peoples in costa rica, cuba, dominican republic or puerto rico. Perhaps our general lack of incorporation of the local flavor to the tourist offerings, or failing to understand the value of our folklore, art and idiosincratic derivatives is a consequence of low self esteem and negligence in identifying what a tourist wants, seeks, or needs. This is changing. With our future new campaign, directed to internal tourism, we hope to appeal to foreigners and natives alike, encouraging the development of product based on cultural strenghts, which are not presently incorporated into our tourism offers;

Ruben, I dig your music, especially that tune “Pedro Navaja”. While it may have obvious influences, it’s still uniquely YOURS. Panama is certainly allowed to borrow from great ideas around the world.  However, it cannot afford to overtly worship Miami, Dubai or any other locale and forget its roots.

Panama’s architecture, music, culture all must be protected as precious resources. Those are among the reasons that travelers travel…to see NEW things. Of course, much of Panama’s culture is a reflection of other cultures - that “sancocho pot” is what makes Panama so fantastic. What I am trying to convey here is that ALL development - tourism, real estate, or otherwise, needs to maintain a Panamanian vibe if you hope to attract “the right” tourists for decades.

Just look at the great cities of the world with tight zoning and aesthetic regulations: Paris, New York, Barcelona…you can’t just throw up any structure you’d like. There are pages of building codes and regulations that maintain the vibes of those places, right down to specific neighborhoods. Ask Paul Stallings about his hotel in Soho, NYC!

My family (both recently approved Pensionados) and I are building a small hotel in Pedasi, Los Santos on the Southeast tip of the Azuero Peninsula. You can bet your bippy that the design will reflect that of an authentic Los Santos dwelling.

Our family hotel under construction in Pedasi, Panama

Why would I do that, even though I could probably get away with building something easier or cheaper, like a minimalist cube?

1. The general look and feel Los Santos has great style

2. Pedasi’s folkloric vibe demands it, even if zoning rules don’t

3. I want my guests to know they’re IN Panama

To sum on this point, if Panama doesn’t make a concerted effort to re-discover and cherish that which is Panamanian, it will end up having tourists and foreign investors leaving more of a mark on the country than the reverse. 

5. “Halloranc” states:” Panamá is Eco-unfriendly”, encouraging “non-sustainable tourism”: Not true.

As explained before, there was no real content to the 1992-2002 Plan for Tourism Development. This produced a lack of legislation directed to, amongst other matters, the encouragement of incentives towards the creation of an eco-tourism industry, and eco-friendly environment, from waste disposal and recycling, to the rescue of our rivers and Panamá Bay. It’s amazing the way ”Halloranc” dismisses the obvious positive impact represented by the work, now in progress, of cleaning up Panamá Bay´s contaminated environment, and the waters of the rivers near Panamá city, and the Government´s initiative to create the first biodiversity museum in America, the Gehry. This are not the actions of an “eco-unfriendly” nation, or government.

Granted, there´s a lot to be done, but we are moving in the right direction.

We are following this intention in our National Plan for Tourism Development. I suggest the blogger to check the news on Costa Rica lately; there is talk of two hotels shut down for contaminating ocean waters and of homes built on protected land without permits. We have to learn from mistakes so we don´t repeat them.

Mr. Blades, I couldn’t agree MORE that Costa Rica is veering off toward potential disaster. BUT, their 20+ year reign as Central America’s tourism champ has hinged upon some great laws (that are indeed now being whittled away by mega-business) that protected the coastline and the rain forest. As far as I know, Panama has NONE of those on the books. See more on Costa Rica’s “Zonia Maritimo” law here.

I’m not suggesting that Panama is not making strides. But the goal should be to SURPASS Costa Rica with more stringent rules on coastal development. To focus only on the City is basically to pinpoint Panama’s principle challenge in tourism: tourists don’t care about the City!

Panama City is a great place to visit for a night or two, but Panama cannot and need not compete on that attraction alone. Panama’s diamond in the rough is its incredible biodiversity OUTSIDE the City. Before we get excited about one museum, we need to be sure that future tourists will be able to see Panama’s biodiversity OUTSIDE of a museum. The amount of deforestation and disregard for animal and plant life in Panama is shocking to me after living so long in Costa Rica, where laws to protect both are taken very seriously.

6. ”Halloranc” states, “Service=Shmervice: No return clients”; Half truth.

Once again, the blogger grasps for anecdotes, not facts, to make his case.He states correctly that in Panamá we need to improve ALL service oriented sectors of our national business not just the tourism industry; it is a national cultural problem. And we not only need to improve service, as in employee attention to the public; the bosses themselves should also be trained in what constitutes service and how to improve their leadership. Then he asserts people are so disatisfied with service in Panamá that they leave angry, never to come back. However, the official program Tourism Satellite Account which includes polls to tourists (over 6 thousand questioned so far), shows an 85% satisfaction index, related on how they were treated, during their stay in Panamá. This is not an anecdotic statement; these are facts. When these tourists were asked if they´d consider returning to Panamá, over 90% said they would. Of course, this doesn´t mean we do not need to improve our service to the public, or stop rising prices, exploiting carelessly the tourist trade. But it is not right to state that service is so bad tourists will not return. That is false. Presently, the need to speak a second language is being reinforced nationally by the government, after it was suspended, stupidly, by past administrations.

Sr. Blades, it’s not anecdotal evidence when I tell you that every time (which is about 7x a year) I, a Spanish speaker carrying an investor’s visa, enter Panama’s Tocumen Airport and am treated with the kindness normally reserved for a terrorist threat. This of course, comes from the always scowling, monolingual immigration team. Mr. Blades, this is our welcome wagon! It’s also not an anecdote to tell you that my travel agency receives regular complaints by the unfriendly, unprofessional staff working at the few hotels we do send business in Panama. But I feel their pain. Ask any hotelier here how difficult it is for them to even FIND qualified help. Imagine trying to open a hotel in somewhere remote…say, Pedasi?

I could write a story per week about poor service and less than ideal employer environment in Panama. But I don’t, because for all the annoyances at work, I really, really love Panamanians. I am not going to claim that 100% of our tourism clients are so annoyed they’ll never come back. But we do receive regular complaints in our feedback surveys far more frequently than in Costa Rica. I believe that Panama’s entire service sector MUST do far better than it’s current performance levels in the basic areas of “please and thank you”.

It’s a fact in any service biz: a happy customer tells one person but an unhappy one tells EVERYBODY. Tourism is about hospitality as much as it is bricks, mortar, rain forest or ocean views. Panama has a long way to go in re-educating the work force and freeing it of some long-held bad work habits. More challenging, I believe that some National Holidays must be revisited to maximize the tourism peak season. Good luck to the politician who takes on that hot potato!

Of all my concerns, the capacity of Panama’s labor force to really embrace the values of 1st class hospitality is my biggest.

7. ”Halloranc” states, “All exclusive; angry locals”.

Again with the anecdotes! The problem is not, as the blogger suggests, the local all inclusive hotels. He, or she?, fallaciously equates Santo Domingo with a couple of hotels located in Coclé beach areas that respond to the all inclusive denomination. It is true that when you arrive to Punta Cana you don´t see Santo Domingo. But when you arrive in Tocumen you have to travel through Panamá to reach San Carlos/Farallón area, wher the “all inclusive” hotels are located. The blogger misses the point again; The all inclusive hotels would love to have their clients leave the premises for hours on end, so they wouldn´t eat and drink them out of revenue. The real problem? The adyacent towns have not prepared tourist products nor have organized their offer so as to take advantage of the tourists presence in the nearby hotels, or residential developments.

The all inclusive establishment can´t guarantee the safety and comfort of their clients once they leave their premises. Therefore, only enterprises that are organized, insured, and produce responsible offers, from adjoining towns near to the hotels, could be encouraged. PLUS, those local offers have to understand they must pay some percentage to the hotel, if they expect to get some of the tourist trade they have brought into the area; it is not free. Where are the local tourist offers for the all inclusive hotel clients?

This could again, merit an entire article unto itself. I’m not saying Panama is overloaded with all-inclusives today. They’d be crazy to build any more today given the limited volume of tourists actually entering the country. As to an all-inclusive in Panama City Mr. Blades, that’s just silly. Again, that reflects the general over-focus on Panama City as Panama’s prime destination, which is just not logical. What I am suggesting is that my experience with Panama’s attitude toward tourism and the tendency of the as-yet-unchecked beach front developers is to create walled-in communities.

Is South Florida style over-development the best we can hope for in Panama?

These developments, along with requisite mega-hotels serve to effectively trap guests in and keep locals OUT. There certainly are more tourists going to the two all-inclusive beach hotels in Cocle than visiting any other hotels out there. How can a small hotelier afford to purchase beach front and build a boutique INCLUSIVE hotel if prices have been driven up by unchecked development? Prices for land in prime areas today nearly DEMAND that investors construct hideous condo towers!

Again Mr. Blades, I invite you to pay me a visit in Costa Rica. There I will show you what a walled in development does to a community versus a dozen mid-size hotels and small restaurants. It’s not easy to make a living as a restaurant or tour operator sitting outside the walls of an all-inclusive. It IS easy amid a vibrant tourism destination with plenty of foot traffic. Bocas del Toro demonstrates the latter to some degree. I believe wholeheartedly that Panama needs to attract and foster small hotels in open community development plans and to NOT cordon off the prime beach front to a handful of mega hotels.

My three years of participation in the real estate sector (I am an investors in a small Panama real estate office in Santa Clara) keeps me abreast of most of the projects in the region. From what I hear, most are talking about mega-hotels or no hotels at all. Certainly in your position you’d know more than I, but I can count on one hand the number of boutique, high end hotels in construction outside of Panama City. My travel agency is desperately awaiting more rooms to fill.

Why aren’t these type of projects flying up all over Panama? I have my theories, but I’d love to hear yours. Long and short, I’d much prefer to see Panama’s prime coastline developed thoughtfully with smaller projects and 20 to 40 room hotels rather than mega projects and mega hotels. I believe it’s what today’s savvy traveler wants and more importantly, I firmly believe that it’s better for Panama and Panamanians in the long run.

Finally, responding to a blogger´s column is tantamount to having a conversation with a fictional character. Who is “Halloranc”? Is he/she objective? Is it a person, or group? Is the blog motivated by foreign interests who hate Panamá, or local political interests that oppose our government? Who are these bloggers? This one seems to live and do business in Costa Rica, which throws more than a hint of bias in what he writes. It can be anybody posing as an American in the witness protection program, posing as an independent blogger. Who cares! We invite all responsible people to make an appointment, visit our offices and present personally their opinions, criticism and suggestions, in a constructive manner. We are always ready to adopt sound ideas and meet with anyone. In this particular case, “Halloranc” may need to get in a plane and come to Panamá to see us in which case, must likely he will refuse this offer.

Be well, oh fictional critic!

This is the only part of your response that chaps my hide. I’m not exactly the high profile type, but Mr. Blades not only SHOULD you know me, you DO. I sat alongside you at last year’s AMCHAM tourism conference, where Nancy Hanna was kind enough to invite me as a guest speaker.

Mr. Blades, since you left the AMCHAM event (same as the year prior) immediately after your own speech, couldn’t have heard my theories on much of the content discussed above. No worries, though, I summarized the event here and am happy to give you my speech in person (and in Spanish) at your behest. I have nothing to hide and no secret agenda behind my blog. I have one of the few travel agencies in Panama bringing in high-end clientele. Isn’t it your JOB to know ME? But to be fair and to avoid future mix-ups, I’ve updated our Blog to include writer profiles. Now readers can find out my favorite Beatle (George).

Mr. Blades, I kindly accept your invitation to me. Since I live in El Cangrejo, my travel expenses ($1.25 taxi) will be minimal.  Just let me know what works for your schedule. What I do want to make clear is that I’m not bashing Panama, you or IPAT. I think you have certainly done more than prior administrations. I’d like to think that I have similar motives as you — I want Panama to become a viable, long-term tourism destination. All butt smooching aside, I realize you’ve taken a hefty pay cut (and certainly glamor cut) by working your post at IPAT. But understand that I too am taking great financial risks by spending time and money in Panama, while I could continue on with a proven product in Costa Rica. Why would I do that? — Because I love this country!

Sincerely Mr. Blades, if I sound frustrated, I apologize.  But as the General of IPAT, I believe you need to solicit more input from the troops on the ground. Some of us actually know what we’re talking about. 

In summation, while it may feel like IPAT and Panama are both making headway, I fear that marching full speed ahead won’t count for much if we don’t discuss where we’re going and why. More than one army has marched merrily off the cliff.

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Filed under: Business, Politics, Real Estate on June 5th, 2008