Why are tourism and ecotourism important to Panama’s economy?

Tourism and ecotourism are vital components of Panama’s service-based economy, contributing significantly to national revenue alongside sectors like finance and real estate.12

Tourism is driven by the country's unique geography and cultural heritage. Visitors are drawn to the Panama Canal, extensive coastlines featuring numerous islands, and the blend of colonial and modern architecture in Panama City. The mild climate supports year-round recreational activities, including water sports, golf, and fishing, while the San Blas islands offer exposure to the traditional culture of the Kuna people.13

Ecotourism is particularly important as a strategic economic development tool. Following the withdrawal of U.S. forces, the government actively promoted ecotourism to diversify the economy and compensate for lost revenue. Panama’s rich biodiversity—supported by diverse habitats like cloud forests, coral reefs, and tropical rainforests—attracts visitors interested in exploring the country's abundant flora and fauna. National parks and reserves, which cover about one-sixth of the nation's land, serve as key destinations for these travelers.214