Panama—the information on both travel rates and expenditures by destination stems from a survey of 3,498 Panamanian households.

Foreign tourism has a much higher impact on the economy than domestic tourism. In absolute terms, foreign tourism expenditures are highest in Panama Province, but in relative terms they may contribute up to a fifth of the GDP in peripheral areas with low levels of provincial GDP, such as Bocas del Toro.

**Table 4. Estimated Foreign and Domestic Tourism Expenditures as a Share of Province GDP**<sup>a</sup>

||**Province**<br>**GDP**<br>**2005,**<br>**Million**<br>**US$**|**Percent of**<br>**Tourist**<br>**Nights**<br>**Spent by**<br>**Foreign**<br>**Tourists at**<br>**Each**<br>**Destination**|**Foreign**<br>**Tourist**<br>**Expenditures,**<br>**Million**<br>**US$/Year**<sup>**b**</sup>|**Domestic**<br>**Tourist**<br>**Expenditure**<br>**s, Million**<br>**US$/year**|**Foreign**<br>**Tourism**<br>**Expend-**<br>**itures, % of**<br>**GDP**<sup>**b**</sup>|**Domestic**<br>**Tourism**<br>**Expenditures,**<br>**% of GDP**|
|---|---|---|---|---|---|---|
|Panama|9,392|71%|452–642<br>[+313]<sup>c</sup>|3.8|5–7 %<br>[+3%]<sup>c</sup>|0.04%|
|Bocas del<br>Toro|165|4%|17–31|0.9|11–19%|0.57%|
|Chiriqui|1,036|12%|53–94|4.3|5–9%|0.41%|
|Rest of|3,413|13%|57–100|8.8|2–3%|0.26%|
|Panama|||||||
|Total|14,005|100%|579–867<br>[+313]|17.8|4–6%<br>[+3%]|0.13%|

a. For details about the estimation procedure and the meaning of the ranges, see text footnote 15.

b. Expenditures in the national accounts and the survey data in this table exclude the cost of international travel by air and land.

c. In addition, tourists in direct transit (that is, tourists that spend less than four hours in Panama and do not leave the airport) have spent a further US$313 million in 2006. This constitutes an additional 3 percent of the GDP of Panama Province. This brings total tourism expenditures for the whole country to 7 to 9 percent of the GDP.

_Source:_ Authors’ estimates from tourism survey data for the Tourism Satellite Accounts, 2008.

Tourism revenues have benefits beyond those accruing directly to hotel operators and employees, tour operators, restaurants and shops who sell goods and services to tourists. Incomes earned from these expenditures by tourists are typically spent at least in part on local goods and services, thereby further raising output and incomes. To the extent that local goods and services are elastic in supply and can thus expand in the face of increased demand, the multiplier effects of tourism (or increases in other sector outputs) can be substantial.

province (adjusting for the higher spending in Panama and Colon). The second method uses the estimated daily per capita expenditures by foreign tourists (all tourists and tourists that only went to Panama and Colon) and multiplies these expenditures by the cumulative number of days spent at each destination. This method can be described as a ―bottom-up‖ approach while the previous method is ―top-down.‖ Estimates using the second method result in the upper bound estimates of total tourist expenditures by province in Table 4. Expenditures by tourists in direct transit (not part of the TSA survey) are assumed to occur in Panama Province and contribute a further 3 percent to its GDP. These results are shown in square brackets in Table 4.

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