The Compass Report

A leader’s faith in real estate

Panama Star Some groups like, the Panamanian Chamber of Construction, have asked the government, to increase public investments, to act as a catalyst, for public works that remain stagnant.

With a hazy future, the new president of the Panamanian Promoters and Real Estate Brokers Association, Osvaldo Marchena, remains optimistic and believes that, “ now days there are few existing markets with solid economic foundations. Panama, just happens to be one of them, so that means we are solid”.

Still very positive, Marchena , says that the real estate sector will rise again, and much faster than most people think. Adding that it will be fueled by transnational companies, that will create bases in Panama. There are 60,000 foreign companies registered in Panama.

He also claims, when summing up the companies and commercial trades with Taiwan, Singapore, Chile, and a recently closed deal with Canada, it increases the countries value.

“Any economic group, that makes the decision, to come to Panama, for whatever the reason, will need office space, houses to live in, and places to go on the weekends”.

These clients have the capacity to consume, and they are motivated, by finding the most adequate living arrangements possible, allowing them to live comfortably, and at the same time run a business. They do not want a cheap place to live, says Marchena.

Currently, there are 455 active projects, totaling 14,342 available living units, meaning a 14 percent increase.

But the diminishing sales rhythm, of the last two months, must be recognized.

In October, sales dropped more than 80 percent

Marchena, does not seem to be bothered by these numbers, and continues to stand by his claims.

Guilt trip: Luxury travelers tone it down in hard times

 She had planned to visit the Medina in Fez, the souks in Marrakesh and the mosques in Casablanca. But the Moroccan vacation would have set Nancy Yale back $15,000 for her family of five. And after laying off a full- and part-time employee last fall, the travel agency owner in Fairfield, Conn., decided to scrap the December trip.

"I just didn't think it was prudent. It wasn't a good message," she says.

Call it luxury shame, stealth wealth or guilt downsizing. Even if you've "got it" — and maybe especially if you've got it — economic times like these are no time to flaunt it.

In a time when posh has become a four-letter word, forget about keeping up with the Joneses. It's more socially expedient to stay down with them. Economic turmoil is giving luxury a bad name, it seems, and not just among the private-jet set, either. The desire to tone down consumption is affecting how some Americans vacation — or at least how they say they vacation.

It's the sort of environment that has people claiming they got that winter tan on the local ski hill, when in truth, they were skiing in Gstaad. Or, for appearances' sake, hailing a cab from the airport instead of pulling up to the hotel in a town car — never mind that the fare's the same.

The sentiment resonates in cyberspace and includes travelers who say they're lying or feeling guilty about their vacation plans or simply keeping mum about them.

Even former Securities and Exchange Commission head Arthur Levitt hasn't escaped a guilt trip, telling the New York Times Magazine he canceled a spring trip to the Far East, because "I don't feel right about spending large sums of money in this environment."

"Luxury shame is very real," says travel industry analyst Henry Harteveldt of Forrester Research. "When your neighbors are losing their jobs and you're doing well, you don't flaunt your success. Of course, there are still people who will continue to enjoy the fruits of their success. They may still rent the beachfront home and continue to fly in the G5 and tool around in the leased Bentley, but they're not going to go home and brag that that's what they did on vacation."

In a recent survey of travelers' intentions, Forrester found the solidly middle class intended to cut back on travel, but so did 28% of those with household incomes of $100,000 and above. "It shows that the well-to-do are not being spared by this recession," says Harteveldt.

Neither are the wealthy, even if it's just for appearances' sake. One of Yale's best clients canceled a pricey trip to Asia explaining, " 'It's too embarrassing to tell anyone I took a $40,000 vacation,' " she says.

Josh Friedman, a luxury travel consultant in San Francisco, relates how a wealthy Pasadena couple, "the kind of people who book $3,000-a-night suites," called him to say they're cutting back 50% on everything and had him redeem frequent-flier miles for a trip to the East Coast. Another client who booked a $30,000 luxury European cruise with extra nights in Athens and Rome lopped a night off to assuage his guilt over spending so much. It cut the price by a mere $1,000 or so, but "it made him happy," says Friedman. "He realizes times are tough."

Beverly Hills-based Gary Mansour, CEO of Mansour Travel Co., says his affluent clients are still traveling: They're just being more discreet about it. Maybe they'll downgrade from their own private jet to a seat in a shared one. Or they'll pop open a bottle of Cristal in the privacy of their hotel room rather than in a restaurant, he says.

Not that excess — wretched as it may be regarded these days — isn't thriving in some decadent corners of the beleaguered economy. In fact, at the newly opened Encore Las Vegas casino, the nightclub, XS ("where too much is never enough"), offers a $10,000 Cognac and Champagne cocktail (includes stingray cuff links for the gentleman and a gold necklace for the lady). A few miles away, the Palms Place Hotel and Spa has reintroduced its $120 Veuve Clicquot Pedicure, back by popular demand.

The upscale Caribbean island of Anguilla issued a press release in January boasting about the traffic jam of private jets on its runway over the holidays. A marketing pitch for an $18,000-a-night private resort in Barbuda asks without a hint of irony, "Who says luxury isn't still affordable in tough economic times?" And in Waikiki, the Halekulani Hotel just rolled out a fleet of over-the-top vehicles, including a custom Maserati GranTurismo and Lotus Exige S, for its well-heeled guests to tool around in. (Those booked in the $7,000-a-night Premier Suites get the cruisers at no extra charge.) While CEO Peter Shaindlin acknowledges that tough times can spark traveler guilt, the flashy cars are "about quality. I don't think there's anything embarrassing about quality."

Perhaps. But in some quarters, lean times have sparked a shift in marketing messages. The Ritz-Carlton chain, which in the past has trumpeted luxury amenities bordering on the absurd (bath butler, anyone?), is playing up its altruistic side. Give Back Getaways, launched in April, puts willing guests in a half-day local volunteer effort. Response so far has not been huge, says spokeswoman Sue Stephenson, but a sister program, Meaningful Meetings, which donates 10% of a participating group's room revenues to charity, has resulted in $420,000 in donations since 2007.

Virtuoso, a travel-agent network that specializes in luxury travel, has similarly tweaked its message. In December, it launched a "Return on Life" advertising campaign that stresses authenticity over opulence.

"People are traveling less for bragging rights these days," says Virtuoso spokeswoman Misty Ewing. "Luxury travel had an (image) of self-indulgence. But the mind-set has changed. It's really about wanting to spend quality time with family and friends."

The Leading Hotels of the World group of high-end lodgings has shifted its emphasis, too. "In contrast to last year, we aren't marketing over-the-top. We're marketing more value-driven packages," says senior marketing vice president Claudia Kozma Kaplan.

At Abercrombie & Kent, which bills itself as "the world's premier luxury travel company," interest in trips that incorporate a philanthropic element is on the upswing, says spokeswoman Pamela Lassers. The company now offers six itineraries, up from two. Conversely, a sale in February that promoted savings of up to 60% on trips such as luxury African safaris and Egyptian cruises signals less-than-vigorous bookings on A&K's more self-indulgent tours.

Some in the industry believe the recession is sparking a behavioral shift that will continue even after the economy improves.

"We're witnessing a change in consumption patterns," says Karen Weiner Escalera, a publicist who writes a newsletter and blog on luxury travel trends. "People are looking more at function and comfort and authenticity."

She predicts that luxury as a marketing pitch will lose ground to messages that focus on niche interests as people pursue true passions rather than indulgence for the sake of indulgence.

Not that so-called luxury shame is necessarily bad for business. On Grand Cayman, The Reef Resort, a midscale all-suites hotel on a predominantly upscale island, director Tom McCallum believes he has gained some guests this season who in better times would be checking into digs that cost more than the $250 a night he has been charging.

"We're definitely getting people who would have grabbed a luxury hotel last year," he says. "People still want a Caribbean vacation, but they want to tell themselves they haven't spent as much money. They're being more selective."

But they're still traveling. At Ellison Poe's Little Rock travel agency, sales of midrange package tours to Europe may be down, but bookings to exotic locales such as Sri Lanka and Madagascar are up, thanks to deals being snapped up by people whose bank balances or credit limits still allow it.

"I feel like a Turkish rug salesman," she says. "These deals won't be here in three months, so if you have the money, you should take advantage of it."

That's Jackie Ross' sentiment exactly. The retired Bellingham, Wash., hypnotherapist sailed the eastern Caribbean in February, her third cruise in a year. She and her husband have always been avid travelers, and it's not unusual for friends to ask them where they're off to next. These days, however, her responses are more circumspect. "I'll say, 'Oh, we're just going somewhere warm for a while,' " she says. "It's general sensitivity. There are just so many people who are going through so much. We've been affected by the stock market, too. But we'd planned this cruise, and we're going to go."

They'll be sailing again next year, too. "We weren't going to," Ross says, "but a really good deal came up."

- USA Today

Tips To Help Decide About Retiring Abroad

Retiring abroad has become a growing trend in recent years for millions of U.S. retirees. Here are some tips to help you find and research your foreign paradise.

Do Your Homework

Retiring Americans are choosing to emigrate for a variety of reasons—adventure, a better climate, lower cost of living. Whatever your reasons, before you sell the house and kiss the grandkids goodbye, you need to do some homework and learn everything you can about the country and community you're interested in—climate, crime, cost of living, insurance, taxes, visa requirements and more. Some good resources to help you get started are www.internationalliving.com and www.escapeartist.com, which provide tons of information on dozens of countries. Also, check out the Central Intelligence Agency World Factbook at www.cia.gov—click on "Library", then "The World Factbook".

Another good idea is to talk or network with some expatriates who have already made the move you're thinking about making. They can give you tips and suggestions, as well as the advantages and disadvantages and day to day reality of living in a particular country. Some popular sites for finding expat resources are www.liveabroad.com, www.expatexchange.com and www.expatforum.com.

Once you find a country or two that strikes your fancy, you need to visit multiple times at different times of the year so you can get a feel of weather changes. If you like what you see, to find help scoping out potential properties or to find a local real estate agent, visit the International Consortium of Real Estate Associations at www.worldproperties.com.

Need To Know Whether your international retirement plans are seasonal or year-round, here are a few additional areas you need to consider:

• The shrinking dollar. Retiring abroad used to be seen as a surefire way to live beyond your means, and for some countries it still is. But the U.S. dollar has been in a steep decline in recent years, so your money may not stretch as far as you think. To compare currencies, see www.iccfx.com.

• U.S. taxes. Most people aren't aware that even if you're living in a foreign country full-time, you still have to pay federal income taxes. And unless you sell all your U.S. real estate, or live in a no-income tax state (Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming) you'll owe state taxes too. For more details see IRS publication 54, "Tax Guide for U.S. Citizens and Resident Aliens Abroad", at www.irs.gov or call 800-829-3676 to have a free copy mailed to you.

• Health care and insurance. While medical care in many foreign countries is vastly improved and very affordable, you need to be aware that Medicare won't cover you outside the U.S. Your best bet is to contact the U.S. embassy or consulate (see usembassy.state.gov) in your destination country to see how you can be covered as a foreign resident. You may want to buy a policy (see www.eglobalhealth.com) that will cover you wherever you live. And for help locating good doctors or hospitals, the nearest U.S. embassy or consulate is again your best resource. You can also search for internationally accredited hospitals at www.jointcommissioninternational.org.

- The Savvy Senior

Can Tourism Save Panama Real Estate?

Having lived and worked for nearly a decade in Costa Rica and part-time for the last 5 years in Panama, I am fascinated by how the countries compare and contrast. One of the most noticeable differences is how real estate in Panama is placed ahead of tourism in terms of focus, marketing and money invested. By contrast, tourism has always been the main course in Costa Rica, with real estate being the byproduct. I contend that without the substance of tourism infrastructure, also known as “things to do”, real estate growth in Panama is hollow and unsustainable. I believe the recent bust in Dubai is a prime example of the downside of the “style over substance” approach to real estate development.

Plenty Of Time To Fix Things, Plenty To Fix

The good news is that Panama still has a great opportunity to rescue its real estate market. However, the required approach may unconventional. I believe that the new administration must make a strong commitment to fostering tourism, both foreign and domestic in order to support the last 3 years of real estate madness in Panama. This best part about this strategy is that laying the groundwork for sustainable tourism is not a mystery; the models for sustainable tourism and real estate growth are well known and the expertise is out there. Panama need only look to the successes and failures of Costa Rica, Hawaii, Mexico and other tropical destinations to mimic best practices and avoid common pitfalls. Doing things right will permit the country retain its unique and wonderful identity, while fostering the right type of tourism that can help to support a portion if Panama’s recent real estate growth.

New Administration, Fresh Start?

Panama will soon have a new administration and a chance for a fresh start to clarify its cloudy tourism strategy. I was asked recently by a business colleague to compile a list of tourism ideas and suggestions for this new administration. In turn I asked staff at my travel agency in Panama City to provide me some of their feedback, given that they slog in the trenches of Panama’s budding tourism industry daily. We compiled a monstrous list, then we realized…Panama needs to start with some basic stuff first.

Start Small

What often concerns me about Panama’s approach to business is the tendency to believe that bigger is always better. I can only presume that the scale of the Canal and Canal-related businesses leads many to conclude that scale is always desirable. Going big has been Panama’s approach to tourism in the past: big cruise ships, big duty free shops, big hotels, giant swimming pools and large convention centers. When discussing tourism ideas, I frequently hear many well educated locals talk about Panama’s need for mega highways, airport expansions, Disney World-esque attractions and other ideas of Canal-type proportions. Leaving aside for a moment the discussion of the merits of that type of tourism, I believe that before Panama can hope to accomplish ANY large-scale plan, the tourism sector needs to take full advantage of what is already here and solve obvious problems. There’s so much raw tourism material here today in Panama, but we lack the tourism infrastructure to properly introduce travelers to these treasures.

Specific Under-Utilized Destinations:

1. National Parks — Why would you come to Panama? How about ecotourism that surpasses Costa Rica’s for a start? Tourists need a proper introduction to these areas. Parks need guides, trails, maintenance, and enforcement of strict environmental rules. None of that is happening today. AMCHAM is working hard to present a specific plan for improving and organizing Panama’s unpolished gem and I hope the new administration will be open to this study.

2. Casco Viejo — Where are the walking tours? Wouldn’t it be great to see plaques on the historical buildings that clearly identify what tourists are seeing? I know, I know…there are some, but not enough. The Canal History Museum in Casco is fantastic…but in Spanish ONLY. What an incredible destination that just needs a little stewardship to go from OK to Great.

3. Bay of Panama — Imagine taking a water taxi from Costa del Este to Casco Viejo or The Causeway! There need to be more boat tours of Panama’s nearby islands and alternative forms of transport. Panama is surrounded by water, yet water-related tourism (with the exception of giant cruise ships) is very under-developed. It is surprisingly difficult to find a reliable sailboat cruise, sport fishing charter or boat rental in Panama.

What Needs To Be Done FIRST

1. Attract and Grow Talent — Panama needs more tourism talent. We need a quick fix and a long-term solution. Until there is a greater talent pool, hotels will always have staff challenges and tourists will enjoy one-star service.

a. Foreign Consultants/Interns — create temporary, 1 year work visa for foreign interns who are studying tourism at any of the top programs in the U.S., Europe and South America. Let them flock to Panama, make their mark…and go home in a year.

b. More Scholarships — long-term, Panama will need to re-educate its work force to meet the growing demand of tourism professionals. Through scholarships and other incentives, the new administration needs to compel more Panamanian students to pursue undergraduate and advanced hospitality degrees locally and abroad.

c. Reduce Marrakesh Quota — for tourism related businesses, employers like me need to be permitted to legally employ some foreign labor. I would propose reducing the quota to 4 local employees for every 1 foreigner. This will certainly be unpopular with the pro-labor crowds, but could be a huge boon for the economy as foreigners move here to work, spend money and improve the companies where they are employed.

2. Increase # of Quality Hotel Beds — We have a massive shortage of hotel beds in Panama. The tricky part now is to be sure that the RIGHT type of hotels are built. Boutique hotels under 30 rooms are the most successful in Costa Rica, take less time to finance and build, are what the clients of today demand and do not require the government to make concessions to multi-national behemoths, who tend to be chronic offenders of environmental and labor laws. The number of new hotels built in Panama over that past 3 years is pathetic. Why is nobody rushing into the industry when there seem to be so many opportunities? The government needs to answer that question.

a. Talent Shortage — See above. No point in building a hotel if you can’t staff it. Ask any hotelier about this point.

b. Labor Laws — The labor laws of today are punitive to tourism businesses whose M.O. is to be open on weekends and holidays.

c. Real Estate Prices — Speculation has driven prices out of range for many hoteliers to justify the investment. This is a tricky one, but if large scale projects were required to build a hotel within a stated period of time in order to receive ANAM approvals, you would see a lot of developers splitting out a parcel and selling it at a reduced cost to hoteliers. Ironically, this is the smartest thing they could do if they want to sell more land, but most developers fail to see the big picture. Right now, too many prime pieces of land that are perfect for hotels are sitting stagnant while speculators do nothing except hope that prices go up.

d. Incentives — Ley 8 needs to be beefed up to become super sized to Ley 88. If building and running a hotel were easy, and Ley 8 enough to offset the risks, you’d have seen more hotels built by now. Eliminate or reduce IPAT tax, tax on profits, payroll tax and labor laws and make it simple to receive discounts/tax breaks at time of purchasing building materials.
e. Financing — I must preface that by no means do I want the government to get into the banking business, but getting a bank loan for a tourism related project is nearly impossible today. Somehow the banks and the government need to work together to encourage small business loans for tourism and hotel businesses.

3. More Domestic Flights — We need more and better air transportation inside the country.

a. Subsidies — If the airlines don’t want to fly to certain destinations for fear the routes won’t be profitable today (prime example: Pedasi) then the government should step in to help temporarily. If the country is more connected via air, tourists will go to remote places and tourism there will flourish. Don’t believe me? Visit Costa Rica.

b. Airports — Most of the airports are in great shape (compared to Ticolandia) but the administration and service is terrible.

c. Competition — Not sure how difficult this is, but the two operators today really need a third competitor.

4. Traffic / Signs / Driving Laws — a complex issue to tackle, but this needs to be addressed soon as driving around is becoming increasingly difficult for locals, much less tourists. This is a huge turn-off for first time visitors.

Panama CAN be a world-class tourism destination if it so desires. With a world economic crisis now putting increased pressure on Panama City’s real estate bubble, I believe it’s more important than ever for Panama to back up all the style with substance and create a quality tourism infrastructure based on research, careful planning and involvement from the private sector.

by Casey Halloran

Economic Tsunami Hits Baja’s Beachfront Condo Projects

Two years ago, 100 projects were under construction or in the planning stages along the Pacific Ocean in Baja California. Now only 20 remain.

Last month, real estate mogul Donald Trump pulled his name from the Trump Ocean Resort project in southern Tijuana because the developer failed to comply with terms of a licensing agreement, including meeting a deadline to obtain $200 million-plus in construction financing.

But the Los Angeles-based Irongate is not the only developer suspending construction or canceling projects in Baja.

Construction has slowed, if not stopped, at numerous residential sites along the main coastal highway between Tijuana and Ensenada.

Some developers have slowed construction schedules, while others have shuttered projects and returned deposits.

Developers of El Milagro, a 500-unit project in Rosarito, have stopped construction and returned deposits.

The developer of Las Olas Grand and Mar y Sol reportedly is transferring deposits from Mar y Sol into Las Olas Grand and scrapping a second project.

Abandoned Development

San Diego-based Baja Resort Advisors, developers of The Falls at Puerto Nuevo, a 92-unit condo project on the coast, gave buyers credit at La Elegancia when it decided to abandon development.

La Elegancia is a 19-story, 107-unit condo project under way in Rosarito by Mexican developer GJL.

“The credit crisis in the United States affected Mexico because many Mexican banks and funding companies are funded through Wall Street,” said Guillermo Martinez de Castro with Real Estate Development International, a Mexican developer with three projects in Baja.

Gardenhaus, Garden Homes and Terra Sur are all self-funded.

The residential real estate market in Baja mirrors what’s happening in the San Diego market.

In San Diego, median prices of existing attached homes was down 36.6 percent to $190,000 and down 31.4 percent to $327,000 for detached homes in January compared to January 2007, according to the San Diego Association of Realtors.

Calculating media prices and sales volume is a bit more difficult south of the border. Median prices are down 20 percent to 30 percent, according to industry experts.

Larry French, an agent with Baja Real Estate Group in Rosarito, called the price reductions a “price correction.”

“I think we have seen a similar price correction that you have seen in Southern California, but we didn’t have as far to fall,” said French.

Another agent said projects started before the slowdown are continuing, but said projects that were not “out of the ground” are struggling because of financing.

“The world is in an economic tsunami and we are all wondering if the water is finished rising,” said David Biodolillo, an agent with Baja123 in Rosarito.

Biodolillo said despite the turmoil, buyers will eventually return to Baja because of its proximity to the United States, the nice weather, and the comparative low cost of property.

A buyer can find a three-bedroom, three-bath condo at Gardenhaus, a townhome development in Rosarito, for $120,000.

“We started to see traffic trend up in January. Lookers are starting to buy. Not in the quantities we like, but it is better than it was last year,” said Biodolillo.

Biodolillo said his team sold 50 properties in 2008 compared to 100 in 2006.

Visit Abacus nowVisit Tourism for Tomorrow to learn more Medical Tourism: Vaccinated Against the Recession?

A forecast by Deloitte Consulting published at the end of 2008 projected that medical tourism originating from the US alone could jump by a factor of ten over the next decade.

Reading the economic section of the newspaper has never been more depressing than over the last few months. The news is dominated by headlines of the failing economy with stories about the crumbling financial and real estate industries, the halt of manufacturers' production lines as well as companies announcing yet another wave of job cuts. The tourism industry has not gone untouched.

In December 2008 the World Travel Organisation (UNWTO) forecast that in 2009 there would be a decline in international tourism of approximately 0- 2%. Such a decline does not seem that bad when compared to other sectors, however this is the first time since the Second World War that the tourism industry will have negative growth or, at best, flat growth. Whoever claims to be untouched by the recession, whether it be a country, industry sector or company, will be looked upon with scepticism as people think they are either in denial or simply have not yet been directly hit. But is every sector really suffering from the economic turmoil or do recession-proof sectors exist?

The current economic downturn is testing one sector that has long been believed to be recession proof – the health care sector. It seems that even though the residential real estate market has fallen flat, banks are still willing to lend money for medical space development since there continues to be a rise in demand. If you break an arm, for example, seeking treatment is not optional. According to the Association of Executive Search Consultants (AESC), search consultants anticipate that executive job opportunities in the health care industry will increase by 32%.¹

This is good news for hoteliers looking for a job, since some hospitals and clinics recruit hotel General Managers to run their operations. For the hotel industry at large, the even better news is that within the health care economy, there is one small sector that is booming: medical tourism.

Medical tourism is a term used to describe the rapidly growing practice of travelling across international borders to obtain health care. Such services include not only short hops to Colombia for a nip and tuck, but also trips for infertility treatment, dental surgery or complex specialised procedures such as joint replacements or cardiac surgeries. To minimise the dangers of travelling soon after the operation or simply to take full advantage of the trip, medical tourist patients often combine their medical trips with vacation time set aside for rest and recovery in the destination country.

A number of travel agencies now offer "health care holidays". In South Africa, for example, low-cost plastic surgery can be followed by recuperation on a safari, away from friends or family who might disapprove or stare at post-op wounds or scarring. Nearly every operation is followed by a few days in a nearby luxury resort where the patient can relax, recover, and do some sight seeing.

Medical tourism has been with us for many decades. Thousands of years ago, health pilgrims travelled to mineral-rich thermal springs and during the 16th Century, medical tourism experienced a boom in Europe where tourist towns grew in places like Baden Baden, Bath or St. Moritz. However, globe-trotting patients only ever occupied a niche. What is getting people really excited today is the fact that medical tourism is on the threshold of a dramatic boom and is quickly becoming the only viable option for more and more people.

According to a study published by Deloitte Consulting in August 2008 the number of Americans travelling abroad for treatment will increase from 750,000 in 2007 to 6 million by 2010 and reach 10 million by 2012. The authors reckon that this exodus will be worth US $21 billion a year in developing countries in four years time. The forecasted growth is particularly important in the US since around 46 million Americans lack health insurance and other tens of millions have minimal insurance coverage.

Europe's state-funded systems still give patients a reason to stay at home, but even here, private patients may start to travel more as it becomes cheaper and easier to get treated abroad or as they become impatient with long waiting lists for treatment.

The key factors fostering the growth of this industry include:

Quality & Price: An increasing number of hospitals are gaining international accreditation and common surgical procedures can be done in world-class hospitals for about a fifth or less of the price charged in American hospitals. Asian hospital chains stand to be the biggest winners with one of the most famous hospitals being the Bumrungrad in Thailand.

Bumrungrad has been described as the "United Nations of hospitals" since it attracts more foreign patients than any other hospital in the world. It is run as a five star hotel (on-site valet parking, team of interpreters to help with language problems, limousine pick-up service at the airport) and is considered one of the top hospitals in the world with treatment here costing about one-eighth of what it does in the United States. There are also "local hospitals" going global. In recent years leading American hospitals such as the Mayo Clinic and Johns Hopkins have set up offshoots in the Middle East and Asia.

Convenience & Speed: Two major draws to medical travel are the convenience and speed. Countries that operate public health care systems are often so taxed that it can take considerable time to get non-urgent medical care. In Britain and Canada it could take 1 year to get a hip replacement, while in Thailand, for example, it can be done within a week.

Global Economy: A new global citizen whose life and work transcends borders is emerging. Many people no longer live exclusively in their country of origin and are becoming increasingly mobile in both their temporary and permanent work assignments. These global citizens are willing to pay for the healthcare systems which match their global lifestyle.

Global Private Health Insurance Coverage: In an attempt to stay competitive and referring back to the "global citizen", there are a number of private health insurances who offer global coverage including costs of transportation. After all, if it is cheaper for the uninsured patient to go global, it is cheaper also for the insurer.

It is no surprise that, given the attractive growth forecasts of this sector, various countries are trying to promote themselves as "health care destinations" to get a piece of the pie. According to McKinsey & Company, the top 5 medical tourism destinations are currently Panama, Brazil, Malaysia, Costa Rica and India. India in particular is looking to become the world leader in medical tourism.

Last year India received around 150,000 medical tourists and is forecasting an annual growth rate in this sector of 30%. The Middle East has also tried to learn from these destinations and is trying to create local brands in order to attract international patients and insurance companies. One of the most well known medical tourism projects in the Middle East is Dubai Healthcare City. Dubai Healthcare City was designed not only to attract medical tourists but also to reduce the need for residents to travel abroad to receive high quality treatment.

As these health care destinations develop, so does the need for more traditional local services such as hotels, restaurants and other commercial property. In order to offer attractive medical packages these developments actually go hand in hand. If we take Dubai as an example, surely the current economic environment putting several tourism related projects on hold will not help promoting Dubai as a medical tourism destination.

Additionally, the number of expats leaving the country will also put a strain on the system. In fact, Tatweer has apparently put some projects in Dubai Healthcare City on hold. Another point to consider is that during tough times, we assume that medical tourism will accelerate due to its vastly lower cost, but on the counter side, a lack of cash may impact offshore medical business since customers just don't have the money for non life-threatening surgeries like cosmetic surgery, dentistry, and Lasik/laser procedures.

The recession proof vaccination in health care tourism isn't 100% effective and Deloitte's estimates in the current environment are probably over optimistic since these were published only a few months before the entire financial meltdown. On the other hand, HVS Executive Search will keep a close eye on this sector since medical tourism is still shining in this dim economy and there is evidence that the future of health care promises to become increasingly global.

By Lorenza Alessie

The World's Best Ecotourism Destinations

As ecotourism garners interest among a growing number of travelers, eco resorts have popped up everywhere, from Florida to Fiji. In fact, the ecotourism industry is growing so quickly that it would be nearly impossible to map which countries have become the greatest eco-destinations, especially when the terms "eco" and "green" are thrown around so readily that it can be hard to tell what is genuine and what is simply a marketing ploy. Ecotourism at its heart not only preserves natural habitats and indigenous cultures and species, but actually works in favor of conservation by bringing additional resources that the local economy would otherwise not have, so the applications of the term can be quite different, which makes ranking such locations even more difficult—if not impossible.

Instead of ranking these destinations, NuWire decided to recognize five countries whose efforts in particular realms of ecotourism have gone above and beyond the norm.

Costa Rica: Preserving biodiversity

Perhaps no other country has embraced ecotourism the way that Costa Rica has. While many nearby countries are hoping that industrialization will spur their economies, Costa Rica is managing responsible growth by protecting its environment and its remarkable biodiversity.

Costa Rica is one of the most biodiverse countries on earth."Costa Rica is the most biodiverse country on Earth," said Glenn Jampol, who owns two hotels in Costa Rica and serves as president of the Costa Rican chapter of the National Association of Ecotourism (CANAECO) and on the board of "directors for the International Ecotourism Society (TIES). “[It has] more than 6 percent of all species known to exist within its borders."

The country has 527 endangered plant species and 57 animal species that are critically endangered, endangered or vulnerable to becoming endangered, including turtles, manatees, toucans, jaguars, primates and sea otters. Fortunately, Costa Rica has established 24 national parks, which span over 21 percent of the country’s land, to protect these species from possible extinction. Visitors can get up close and personal with many of these species while exploring the country’s national parks, rain forests, beaches and volcanoes.

Costa Rica’s reputation as one of the most biologically diverse countries has not only spurred ecotourism, but has also united the country’s government, native communities and private sectors. The popularity of Costa Rica’s natural habitats led to the expansion of protected areas, where logging, poaching and some agricultural activities are now prohibited.

Kenya: Creating alternative fuels

Kenya’s efforts to promote clean energy and sustainability have surpassed those of much larger, wealthier countries. Its ecotourism industry is composed mostly of smaller camps and lodges, many of which have turned to wind and solar power as an alternative to wood-burning stoves. Droughts have placed a great demand on firewood, which approximately 80 percent of all Africans use to cook their meals. Not only is the excessive use of firewood turning savannas and grasslands into barren deserts, but, according to the Household Energy Network (HEDON), the abundant smoke produced by the wood is the fourth leading cause of death and disease in the world’s poorest countries.

Efforts to curb wood-burning in Kenya preserve the environment and save livesFor these reasons many lodges have created wetlands where their recycled wastewater can be turned into fuel that can be used for warmth or cooking. Environmental organizations like Urban Harvest have also come up with a way to reduce the country’s reliance on firewood while stimulating its local economy. The organization teaches local Kenyan women how to make briquettes, which perform the same types of function as firewood and can be made by compressing recyclable materials like saw dust, paper, rice husks, leaves and grass.

To protect natural wildlife, a main source of pride and tourism for Kenya, societies like Ecotourism Kenya encourage visitors to only book safaris with tour groups that keep their vehicles on designated paths. They also encourage tourists to take advantage of the walking safaris that are frequently offered by indigenous people, such as the Masai.

Belize: Appreciating marine life

Though Belize has many natural wonders, one of its biggest ecotourism draws is its vast bodies of water and exotic marine life. "Its coastal areas are a huge draw due to their remarkably beautiful water and coral reefs," Jampol said. Visitors to Belize can observe three species of sea turtles, three types of dolphins, river otters and one of the largest manatee populations in the world. These animals can be spotted on sailing, snorkeling and kayaking excursions, all of which allow tourists to enter the animal’s native habitats with little to no disturbance to the wildlife and pollution to the water.

In fact, many organizations encourage visitors to explore Belize through its series of lagoons, caves, waterfalls, rivers, wetlands, channels and reefs. Eco-friendly tourists can explore Belize’s large reptile and bird populations by traveling down the Burdon Canal, which leads them into the Burdon Canal Nature Reserve. They can experience the 150-mile Belize barrier reef system and Hol Chan Marine Reserve, which allows visitors to enter many of its waters. The Aguas Turbias Reserve consists of 7,000 acres of immense flora and fauna that come from Belize, as well as nearby Mexico and Guatemala. A viewing station in Mountain Pine Ridge allows for ample views of Hidden Valley Falls, where waterfalls disappear into the jungles below. Clarissa Falls and Blue Hole also offer opportunities for swimming and guided tubing tours.

Alaska: Supporting indigenous communities

According to the Alaska Native Heritage Center, there are more than 200 villages and communities throughout the state that are home to native Alaskans. Being that they comprise 16 percent of the state’s total population, Alaska’s government and tribal councils have done their best to incorporate the indigenous population and their culture into ecotourism efforts. The Alaska State Council on the Arts created the Silver Hand Program, which provides free materials and marketing and business training and resources to natives who create arts and crafts that are composed primarily or entirely of natural materials.

Natives from various tribes are hired as guides for hiking and camping excursions that are held in Alaska's Arctic National Wildlife Refuge, one of America’s largest nature preserves. The Alutiiq—who are native to Kodiak Island—are hired as consultants to assist the Kodiak Native Tourism Association with tourism and marketing opportunities. The U.S. Fish and Wildlife Service is working with the Mekoryuk tribe on Nunivak Island in an effort to allow the tribe to co-manage the island’s musk ox, one of the nation’s largest federally managed herds. Natives are also employed by private tourism agencies as boat captains, wilderness guides, pilots and lodging managers.

Thailand: Righting past wrongs

Thailand didn’t begin as an extremely eco-friendly destination when it first became a tourism hotspot. Over the years, however, the country that was once famous for logging, ecological encroachment and the unnecessary killing of animals for profit has turned over a new leaf.

“Thailand...really lost much of its draw as an eco-destination due to the uncontrolled development in the most attractive areas and its growing problems with conservation,” said Jampol.
Today, however, the country boasts numerous eco resorts that are not only constructed out of natural materials, such as bamboo, straw and palm, but are situated alongside Thailand’s pristine forests, beaches, plantations and rivers, which allows tourists to appreciate and enjoy the beauty of these untouched lands with.

Organizations like Wildlife Fund Thailand have also mobilized local communities to spread the word that killing exotic animals—especially to utilize just one part—is unacceptable. The fund emphasizes that tourists should boycott any goods made from turtle shells, ivory, or tiger’s or leopard’s teeth. They also urge tourists to boycott any restaurants that specialize in “jungle cuisine,” such as shark’s fin soup, bird’s nest soup, and anything made from the meat of the endangered Malaysian sun bears and Asiatic black bears. The fund has even launched a project called “Ivory Belongs on Elephants,” in which schoolchildren inspect local tourist shops for souvenirs made of ivory. If they don’t find any they provide the owner with a sticker that says "'Ivory Belongs on Elephants. No Ivory Sold Here," which alerts tourists that the shop does not buy products made from elephants.

Actor Seagal eyes up Costa Rica

 Seagal held talks with Costa Rican president Oscar Arias

Action movie star Steven Seagal has told Costa Rica's president that the country should be developed as a centre for making films.

The actor offered to use his Hollywood connections to kick-start a movie industry in the Central American state.

"Costa Rica has everything, both rain forest and dry climate. What it lacks is an infrastructure to make movies," Seagal said in the capital San Jose.

He gave no details about providing personal finances for his idea.

Little output

At a news conference, the screen star gave no further information about a schedule for the project.
The actor held talks with the country's leader - a former Nobel Peace Prize winner - and said they had been "positive".

Central America has little cinematic output, aside from a few small budget independent producers.
Costa Rica is rarely used by Hollywood as a filming location, despite its lack of crime and varied landscapes.

Actor and director Mel Gibson has a holiday home on the country's Pacific coast, but opted to film in Mexico for his Mayan epic Apocalypto.

Segal holds a string of acting and producing credits to films stretching back to the late 1980s, including Flight of Fury and Urban Justice.

-BBC News

Costa Rica Named First BioGem Country by NRDC

(InfoWebPress) – For the first time, the Natural Resource Defense Council (NRDC) has designated a country as a BioGem, Costa Rica, as a recognition of its efforts to become the world’s first carbon-neutral nation.

"These BioGems are some of the last wild and unspoiled places left in the Western Hemisphere,” said Robert Kennedy, Jr., senior attorney at NRDC. “By naming these places as BioGems, NRDC is empowering hundreds of thousands of concerned individuals to take effective action to save these natural treasures for generations to come."

Since 2001, NRDC has campaigned to save more than 30 special natural places that offer sanctuary for endangered wildlife, curb global warming and provide livelihoods for local communities. NRDC redesigned its “Save BioGems” Web site with new features in order to more effectively mobilize online activists to protect these areas.

In Costa Rica, NRDC is working with the Energy and Environment Ministry to identify measures to help the country meet its commitment of becoming the world's first carbon-neutral nation by 2021.

Additionally, NRDC also just signed an agreement with the Costa Rican Electricity Institute (ICE) on energy efficiency and renewable energy projects. In partnership with one of Latin America’s leading ecological facilities — the Tropical Agricultural Research and Higher Education Center (CATIE), located in Costa Rica — NRDC has launched a rainforest rejuvenation project to plant 30,000 trees to restore a natural rainforest. These actions will help Costa Rica reaffirm its position as a global environmental leader and reduce pressure on its biodiversity and other natural areas.

In addition to Costa Rica, other BioGems added to the list include the Carrizo Plain National Monument in central California and the Peace-Athabasca Delta in Alberta, Canada, which are in danger because of oil and gas exploration.

“We have a new opportunity under the Obama administration to protect and save a number of our BioGems,” said Jacob Scherr, co-director of NRDC’s BioGems Initiative. “Places like the Tongass National Forest, Utah’s Redrock Wilderness, and wildlife like the polar bear remain in danger after eight years of reckless policies.”

-Inside Costa Rica

Most expensive property markets in ‘09

NO SURPRISE. Monte Carlo is Number 1 in the Global Property Guide’s list of world’s most expensive residential real estate markets 2009, more than twice as expensive, at US$45,000 per square metre, as the runner up.

Battling for the number 2 position are prime central Moscow and London. Prime central Moscow’s US$20,853 per square metre price tag slightly outpaces core Prime London’s US$20,756 per square metre, though it is fairer to say the two cities are neck-and-neck.
London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London. Both countries have experienced strong currency declines.

MOST EXPENSIVE PROPERTY MARKETS
(based on 120 sq. m. apartment in city-centre )
Rank    Country     City/ Region    Ave. price
(US$/ sq. m.)

1    Monaco    Monte Carlo    47,578
2    Russia    Moscow    20,853
3    UK    London    20,756
4    Japan    Tokyo     17,998
5    Hong Kong    Hong Kong    16,125
6    USA    New York    14,898
7    France    Paris    12,122
8    Singapore    Singapore     9,701
9    Italy    Rome     9,166
10    India    Mumbai    9,163

Source: Global Property Guide (For the complete list go to www.globalpropertyguide.com)
Tokyo and Hong Kong come in fourth and fifth, respectively.

New York, the only US city included in the survey , is 6th, with an average price of US$15,000 per sq. m.

Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m.

The figures are based on the average price of a 120 sq. m. apartment in the city centres of more than 110 cities around the world, typically the economic centres where most foreigners are likely to buy. Data were collected during 2008. The US dollar exchange rate used is that of January 27, 2009.

BARGAIN HUNTERS’ DREAM

For global bargain hunters, there are several places where property prices are relatively cheap, for example parts of the Middle East, Latin America and Asia.

Cairo, Egypt is one of the cheapest cities in the world, with prime city centre prices at around US$600 per sq. m. Another Middle Eastern capital in the bottom 10 is Amman, Jordan, with average city centre prices at US$1,150 per sq. m.

Three Asian cities are included in the 10 cheapest, all located in rapidly growing and heavily populated countries, Bangalore in India, Chengdu in China and Jakarta in Indonesia.

Chengdu, damaged during the magnitude 8.0 earthquake in 2008, remains a vital economic, transportation and communication hub in the heartland of China.

Indonesia was the last country to recover from the 1997 Asian Financial Crisis. However, the economic reforms implemented by the Yudhoyono administration are setting the stage for steady economic growth.
Five Latin American cities complete the list of 10 cheapest cities for property buyers - Concepcion and Santiago in Chile, Quito in Ecuador, Managua in Ecuador, and Lima in Peru.

The same countries also tend to earn good rental yield.

OVERVALUED

Rental yields are generally below 5% in most European cities, suggesting that property is still overvalued.

LEAST EXPENSIVE PROPERTY MARKETS

(based on 120 sq. m. apartment in city-centre )
Rank    Country     City/ Region    Ave. price
(US$/ sq. m.)

112    Egypt    Cairo     574
111    India    Bangalore    657
110    Chile     Concepcion    669
109    Ecuador    Quito    820
108    China    Chengdu    999
107    Nicaragua    Managua    1,080
106    Indonesia    Jakarta    1,102
105    Jordan    Amman    1,150
104    Peru     Lima    1,154
103    Chile     Santiago    1,221

Source: Global Property Guide (For the complete list go to www.globalpropertyguide.com)
Rental yields are generally below four percent in the following cities: Munich, Barcelona, Vilnius, Helsinki, Madrid, Rome, and Nicosia. Rental yields in Europe are lowest on Andorra at 2.2% and Athens at 2.7%.

Rental yields are between 4% and 5% in major cities such as Brussels, Tokyo, Berlin, Moscow, Copenhagen, Warsaw, New York, Shanghai, Paris, London and Geneva.

Returns from rental investments are also relatively low in key Asian cities such as Singapore and Hong Kong and in almost all Indian cities (Bangalore, New Delhi, and Mumbai)

Only six cities have rental yields of more than 10%, led by Chisinau with an average gross rental return of 14%. The Moldovan capital is followed by Cairo, Jakarta, Manila, Skopje and Lima.

High returns can also be expected in Latin American cities. Yields range from 8% to 10% in Panama City (Panama), Bogota (Colombia), Managua (Nicaragua), Santiago (Chile), Buenos Aires (Argentina), and Quito (Ecuador).

Rental yields in Kula Lumpur (Malaysia) and Amman (Jordan) are also typically above 9%.

HOUSE PRICE MOVEMENTS

The recent house price boom and bust defeats the traditional notion that real estate prices are based primarily on local conditions.

The relatively low cost and ease of moving capital around the world has made it easier for people to invest in real estate markets in several countries. This is complemented by the relatively lower cost of international air transport. Several countries have also removed foreign ownership restrictions, a move encouraged by the Organization for Economic Cooperation and Development (OECD) and the European Union.

The result of these changes has been a remarkable increase in cross country real estate investments � helping make the boom, and the bust, truly global.
Highest gross rental yields (%)

Rank    Country    City/ Region    Annual Yield

1    Moldova    Chisinau    14.17%
2    Egypt    Cairo     12.00%
3    Indonesia    Jakarta    11.27%
4    Philippines    Manila    10.99%
5    Macedonia    Skopje    10.11%
6    Peru     Lima    10.09%
7    Panama    Panama City    9.98%
8    Jordan    Amman    9.73%
9    Malaysia    Kuala Lumpur    9.22%
10    Colombia    Bogota    9.19%
11    Nicaragua    Managua    9.12%
12    Chile     Concepci�n    9.04%
13    Netherlands    The Hague    8.97%
14    Chile     Santiago    8.87%
15    Argentina    Buenos Aires    8.85%
16    Jamaica    Kingston     8.80%
17    Ecuador    Quito    8.77%
18    Bahamas    Nassau    8.37%
19    Russia    St. Petersburg    8.15%
20    Trinidad & Tobago    Trinidad    8.14%

Source: Global Property Guide (For the complete list go to www.globalpropertyguide.com)
RENTAL YIELDS FREQUENTLY ASKED QUESTIONS:

1. What does rental yield mean? Why is it important?
The gross annual rental income expressed as a percentage of today’s property purchase price. This is what a landlord can expect as return to his investment.  The rental yield is one useful yardstick of whether property is over-valued or under-valued.

2. What assumptions are made in presenting the Global Property Guide price and rents data?
We are interested in the sort of properties which will be attractive to foreign renters. This is not always the same type of property in all locations.

Foreign renters are usually interested in properties which are in excellent condition, with good facilities, and which have been refurbished or redecorated within the last five years. Our properties are therefore likely to be less expensive than the very newest properties, except where new-builds dominate the market.

In European cities, we lean towards properties in the historic city centres, therefore our typical property is more likely to be a 90-year old refurbished apartment of character, than a newly built apartment.

3. What are the sources of the Guides price data? Can these sources be trusted?
We draw our figures from our own, in-house analysis. Our research is based on a simple yet effective method we systematically scan web advertisements for residential property, looking at offers for sale, and offers for rent, of good (but not new) apartments.

Despite its simplicity, with care and commitment to consistency this method can produce quality results. We begin by defining key upper-end rental districts in the capital city. We take care to keep a database of where the properties are located, so as to ensure consistency in subsequent years. We carefully select appropriate price ranges. We take average prices, rejecting deviant outliers. Buyers of the full data set have access to these comparability specifications.

The data measures up well to data provided by national statistical organizations, where these are available for comparison, and usually performs better than multi-housing organization data.

-  Global Property Guide