by Brian Koslow, Panama Unicorn
With the hospitality sector of Panama‘s economy expanding from the steady increase in business tourism, medical tourism, shopping tourism, cruise ship tourism and about to get another big boost from the new convention center, it may be a good time to see how you can get involved. Notably, Panama‘s hotels have been steadily raising rates, and occupancies have been strong since the announcement of the expansion of the Panama Canal. Of course, many businesses have and continue to expand in Panama, however, owning a hotel — or a hotel unit, can be a unique way for individual investors to gain passive commercial cash flow from the growth of the hospitality sector.
The Panama Canal expansion, international airport expansions, free trade zone expansion, subway system and infrastructure improvements all point to Panama’s fast modernizing society. A tax favorable environment, investment stability laws and property rights laws are compelling attractions for foreigners making investments in Panama. Perhaps most compelling are the effects of Law 41 of August 24, 2007, which allows multinational corporations to headquarter their facilities in Panama, with numerous incentives. Multi-billion dollar companies— more than 60 last year, and another 200 projected during 2012, and over 500 by 2014, are projected to establish their Latin American headquarters in Panama. These multi-national corporations relocating to Panama bring in massive amounts of foreign capital and creates a chain reaction of job growth for Panama’s economy. But if you follow the money, the big hotels are betting that this will bring a lot more business travelers to fill rooms. Statistically, the Panamanian government reports that business travelers are reaching double digit increases, and are staying longer with each visit.
Panama’s Tourism Authority (ATP) has a 40 million dollar advertising budget specifically promoting business conventions and conferences in Panama. ATP is providing many incentives for companies to hold these events and expos in Panama and has already confirmed 32 international events for 2013 and that number is growing. This initiative has already created a 25% increase in their direct hotel occupancy estimates for 2012 alone.
Successful hotels can produce a lot of cash flow for their owners. It’s no surprise that with relatively low cost to build, low taxes, low maintenance costs and low insurance costs, few hotel owners offer the opportunity to share in their bounty. This scenario changes when you consider the boutique hotel ownership opportunity we have found for our clients, that has many advantages for people who want to participate in the profitable hospitality industry.
The Unicorn Park Inn Hotel by Radisson has 96 suites. The suites are attractive to business travelers who want to have the comforts of a living room and studio, while staying in town. The hotel also provides a full array of virtual business services all under one roof, catering to business traveler needs. Hotel suite demand in Panama has largely been overlooked by the big box hotels and suite rates have been climbing which is good for the market niche that this hotel services. But for the Unicorn Park Inn by Radisson, an additional success factor is that the international Italian designer, Coveri House, will be using the hotel to host its fashion shows orientated to the emerging Latin American fashion industry. This will enhance Unicorn Park Inn by Radisson’s hotel traffic, room revenue and occupancy. The Unicorn has the Radisson Park Inn flag, which gives international access to travelers through the Carlson worldwide reservation system. But the key for individual owners is that they can participate in the commercial cash flow that their hotel rooms generate.
David Pierce, CCIM, a recognized expert in the commercial and investment real estate industry, recently stated: “The Unicorn Boutique Hotel by Radisson represents one of the best passive commercial cash flow opportunities that I have evaluated in many years… at greater than a 10% passive commercial return prior to asset appreciation.”
An internationally recognized offshore investment advisory recently released a real estate report entitled, “Five Hottest Investment Markets for 2012” and featured the Unicorn Boutique Hotel by Radisson, stating this opportunity can produce “long term yields that can build your wealth.”
During June 2012, an online expat advisory, Escape Artist, determined that the Unicorn Hotel by Radisson ownership opportunity is the “Best-in-Class” for passive commercial cash flow in Panama City.
One of the reasons for the accolades is that the Unicorn Boutique Hotel is uniquely situated with all suites, and is a very manageable size rather than the behemoth hotels, that have hundreds of employees and huge overhead. The Unicorn Boutique Hotel by Radisson is being built by an international developer with 40-years of experience, who is providing qualified purchasers with attractive incentives during the construction phase, which will be completed in approximately 18-months.
As an added benefit, the purchase of a unit at the Unicorn Boutique Hotel by Radisson, when placed in the name of the purchaser, qualifies toward Panama’s Temporary Resident Visa, which leads to the Permanent Visa, Citizenship and Passport.
More than half of the units have been contracted by people seeking passive commercial cash flow and the ability (if desired) to leverage the purchase into a Visa and Passport in Panama. The Unicorn Boutique Hotel by Radisson gives purchasers an opportunity to participate in the robust hospitality industry that is growing with Panama’s fast expanding economy.
For more information, email Brian Koslow at [email protected]
