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PANAMA - Tourism

Diego Vallarino

Executive President, Grupo VerdeAzul Panama

Bio

Diego Vallarino Lewis, CEO of Grupo VerdeAzul, leads investments that enhance economic and community growth. Under his leadership, Grupo VerdeAzul has created outstanding hotels such as the Bristol Panama a Registry Collection, Marriott Panama Hotel, The Santa Maria Hotel & Golf Resort, and The Buenaventura Golf & Beach Resort, among others. Vallarino joined the board of Banco Nacional de Panama in 2014, rising to the presidency in 2017 and holding this position until 2019. Prior to his time at Grupo VerdeAzul, he co-founded Futurad and worked as a financial analyst for Banco Santander in Madrid. A graduate with an MBA from Harvard Business School, he also has a master’s degree in finance and banking business from the University of Alcalá and a bachelors in operations research and industrial engineering from Cornell University.

"The real estate market in Panama saw a modest improvement in 2023 compared to 2022, despite facing more challenges than advantages."
VerdeAzul is looking to navigate a still recovering real estate sector by boosting MICE tourism as well as sustainable and luxury tourism.
How would you characterize the Panamanian real estate market in 2023?

The real estate market in Panama saw a modest improvement in 2023 compared to 2022, despite facing more challenges than advantages. Fortunately, we not yet experienced the full impact of the Federal Reserve’s interest rate hikes, which typically have a seven-month delay in reaching Panama. Over 50% of our sales cater to homeowners in the social or preferred housing sector, reliant on state subsidies; however, an increase in interest rates significantly curtails their purchasing power. The resilience in real estate sales, compared to 2019 pre-COVID-19 levels, can be attributed to foreign buyers and the migration program. The Qualified Investor Visa, particularly, has been a driving force, contributing to approximately 50% of sales in this category totaling USD300,000 or more. This segment’s growth is mainly fueled by international buyers, who often require less financing and purchase apartments in the city. The influx of multinational corporations also brings 100-200 new employees per company, fostering housing demand. Initially renters, many later become buyers. While a majority of clients are from Latin America, there has been a surge in Spanish buyers, though specific data on their origin is lacking. North Americans, meanwhile, seek areas near the beach, especially for winter escapes. Panama is also increasingly favored for retirement, an underrated market that has flourished over the past 20 years, earning recognition as one of the world’s best retirement destinations due to its numerous benefits. The symbiotic relationship between real estate and finance is a crucial leverage point.

How does the company plan to enhance its involvement in the MICE business in Panama?

Our goal is to be the leading tourism company in Panama, emphasizing our role in key events. With excellent connectivity, security, and proximity to a fantastic convention center and multinational corporations, hosting conferences in Panama City is a logical choice. Moreover, US corporations benefit from tax deductions, a perk negotiated in the FTA. Conferences have a significant impact, filling up hotels and creating a positive business environment. We are optimistic about this sector’s future and actively participate due to our hotels’ ample meeting spaces, which complement the convention center.

What distinguishes VerdeAzul from other competitors, hotel companies, and chains in terms of delivering high-end tourism offerings?

I take pride in managing and owning distinct hotels in Panama and am grateful for our investors’ trust. Each hotel contributes to a unique, iconic network. Our strength lies in 26 years of operating luxury hotels, a feat unmatched by others. Trust from international brands allows us to manage hotels while maintaining franchises, a testament to our managerial prowess. With a presence in real estate, our product offerings are unique. Currently, we are expanding, introducing Verde Concierge, recognizing a need for curated high-end experiences. Leveraging our local residency and travel experiences, we can provide uniquely local experiences beyond hotels. We were forward-thinking in choosing the name VerdeAzul, reflecting our commitment to environmental responsibility, which we believe is financially savvy. Recent aggressive initiatives prioritize a return on investment. Energy reduction is a key focus, featuring solar panels and electric vehicle meters across all our properties. Plastic use has been curtailed, with carton bottles and refillable fountains reducing plastic bottle usage by 11,000 per month in the Marriott alone.

What upcoming projects does Grupo VerdeAzul have for 2023?

Our primary focus is outside Panama City, adopting a prudent and cautious yet optimistic approach. We plan to launch significant projects in the Riviera Pacifica post-election, featuring apartments and services. Beyond hardware, we prioritize creating experiences, offering concerts, events, and various services such as laundry, transportation, and catering. Our aim is to make residents feel as though they are in a hotel, with a dedicated hotline for assistance. These initiatives, set for 2024, aim to enhance the quality of life for residents, leveraging our unique competitive advantage as a group involved in both hospitality and real estate.

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