Regulations and Taxes for Vacation Rental Properties are Demanded by Hoteliers and Yovana Sagarra
Hotel owners claim that renting apartments and houses as short-term vacation spots such as AirBnb represents unfair competition.
Panama City: The rise of platforms offering short-term, low-cost vacation rentals has become unfair competition for hoteliers, who warn of the need to regulate these services, not only in terms of taxes but also in terms of safety. Yovana Sagarra, president of the Panamanian Hotel Association (Apatel), noted that the sector has experienced a decline in demand in recent years, while vacation rentals have grown both in the country’s interior and in the city. She stated that there is a law prohibiting this type of rental for periods of less than 45 days. Sagarra explained that this regulation, in effect since 2012, was initially designed to apply only to Panama City, as at that time there was no significant supply in the interior of the country.
However, that reality has changed, and this type of accommodation is now available throughout the country. The president of Apatel warned that these platforms operate without regulation in Panama, which puts the safety of tourists at risk and makes it difficult to control who stays at the properties. Unlike Panama, countries like Costa Rica and Colombia have established taxes of between 13% and 16%, which cover aspects such as cleaning, platform use, and contributions to the country.
Sagarra warned that if this type of accommodation is not regulated, hotel investors, whose operating costs are considerably higher, will face an unsustainable situation, forcing them to abandon the business. This, she added, would directly affect job creation, contributions to the Social Security Fund, and the families that depend on the hotel industry. “It’s totally unfair and unregulated competition,” she said. Apatel proposes establishing a minimum tax of 15% on these accommodations, as well as regulations that address the phenomenon of gentrification and the potential consequences it could have for Panamanians in accessing housing in central areas, as is already the case in other countries.
Yovana Segarra was sworn in as the new President of the Panama Hotel Association (Apatel) for the period 2025. In her inauguration speech, Segarra emphasized the need to strengthen Panama’s air and ground connectivity as part of a comprehensive plan to position the country as a world-class tourist destination. She highlighted Panama’s unique potential, based on its strategic location, biodiversity, cultural richness and infrastructure. However, she warned of the lack of planning, strategic investment and institutional coordination that had limited the sector’s development.
From a cost perspective, we hotels are currently at a complete disadvantage compared to these accommodation options, because ultimately, it’s an option that tourists choose,” Sagarra said.
