Panama welcomed over three million international visitors in 2025, setting a new record for tourist arrivals. This growth has not translated into a proportional increase in high-quality formal employment, according to a new analysis of official labor data. The sector’s job creation and average wages continue to lag significantly behind the national economy.
Official figures show Panama received 3,004,266 visitors last year, an 8.2 percent increase from 2024. Despite this influx, the tourism sector, officially categorized under Hotels and Restaurants, created only 3,849 new formal jobs between October 2024 and September 2025. Those jobs paid an average monthly salary of $663.80, which is $92 less than the national average wage. Tourism accounted for a mere six percent of all new private sector jobs created in Panama during 2025.
Economic Contribution Versus Labor Market Reality
The tourism industry generated $6.58 billion in foreign exchange earnings last year, excluding international transport. Key entry points all reported growth. The main international airport saw a ten percent rise in visitors, while cruise passenger numbers jumped 11.5 percent. Overnight tourist stays increased by eleven percent. This financial contribution, however, masks a weaker performance in the labor market.
Data from Panama’s National Institute of Statistics and Census (INEC) reveals persistent challenges. Following the closure of the Cobre Panama mine and the subsequent loss of the country’s Investment Grade Rating (Fitch Ratings) in 2024, tourism generated just 2,269 new formal jobs. The sector now employs 120,430 workers, with 68 percent being private sector salaried employees. The average educational level within the sector is 10.9 years of schooling.
“Panamanian tourism will continue to be a ‘Cinderella’ sector until investing in it becomes good business,” said a business advisor, Mr. Quevedo. [Translated from Spanish] He argued that the country urgently needs to transmit confidence and demonstrate coherence in its public policies to attract investment.
Quevedo specifically criticized a legislative proposal to raise passenger transit fees at Panamá’s airports, including the main aeropuerto internacional. “Our economy needs to generate more income, not more taxes,” he stated. [Translated from Spanish] The core challenge, he concluded, is not how to slice the existing economic pie but how to make it substantially larger.
Official Statistics May Underestimate True Tourism Employment
A critical issue identified in the analysis is the potential undersizing of tourism’s true socio-economic impact. INEC’s labor reports only capture direct employment in hotels and restaurants. This narrow measurement likely excludes a significant portion of jobs supported by the wider tourism value chain.
A 2017 INEC study, an advance report on a Tourism Satellite Account for 2007-2013, provides clues to the sector’s real scale. In 2012, for example, hotels and restaurants employed just over 66,000 workers. When accounting for jobs generated by all connected tourism activities, the total employment figure soared to 144,800 positions. This suggests the official statistics may be capturing less than half of the jobs the tourism ecosystem actually supports.
This undercounting has major implications. It indicates the tourism value chain is primarily served by micro-entrepreneurs and self-employed workers. If fully measured, tourism and its ecosystem could rank as the country’s third-largest employer, trailing only the commerce and agricultural sectors.
The structure of tourism employment carries significant social weight. An estimated four out of every five tourism workers are either informally employed or work in companies with fewer than ten employees. Micro-enterprises, both formal and informal, form the backbone of tourism employment. Furthermore, one in four tourism workers is under the age of 30, making the sector critical for addressing Panama’s escalating youth unemployment crisis.
Youth unemployment currently affects one in five Panamanians aged 15 to 29, with rates as high as 27 percent in some provinces like Panamá Oeste. While the economy created nearly 45,000 new jobs in a recent twelve-month period, over 5,000 young people lost their jobs and another 8,600 entered the workforce but could not find employment. The tourism sector’s capacity to absorb young job seekers remains a focal point for economic planners.
Analysts argue that transforming tourism from a generator of low-wage jobs into a driver of quality employment requires a shift in strategy. The focus must move beyond simply counting visitor arrivals. A concerted effort to improve productivity, encourage formalization, and attract larger-scale investment is needed. The goal is to ensure the economic benefits from record tourism spending translate into better livelihoods for a greater share of Panamanian workers.