Chinese tour operators are eyeing Panama as a tourist hotspot, days after the two countries established diplomatic ties.

Operators are planning to push tour packages geared toward U.S. bound Chinese tourists with Panama as an option for an extended one or two-day itinerary. Proposed itineraries include U.S.-Mexico-Panama and Mexico-Panama-Cuba with each tour to include an additional Latin American country.

While currently no direct flights serve routes between China and Panama, according to a Chinese media report on Wednesday, the current state of consular services and travel routes between the two countries “could change at any moment” following the establishment of bilateral relations earlier this month.

Industry insiders expect red tape to be slashed, easing the way for more Chinese tourists to visit the Central American nation that straddles two oceans with its renowned canal. While Chinese citizens do not currently enjoy visa-free entry to Panama, passport holders with a U.S., Canada, Australia, U.K. or E.U. travel permit will be permitted to enter the country for up to 30 days.

The report notes Panama’s attractions, including its northern coast that is made up of the more than 400 San Blas Islands. The islands would provide tourists with a relaxed and solitary environment due to their “unspoiled and beautiful landscapes, indigenous people and simple lifestyles.”

Latin American countries like Panama are keenly eyeing Chinese tourists and their wallets, 135 million of whom traveled aboard in 2016, spending a total of US$261 billion, according to the World Tourism Organization. For many countries in the region, tourism is becoming the second largest source of foreign revenue beyond natural resources and has the potential to stimulate job growth in small and medium enterprises.

Strategies taken by countries across the region to attract Chinese tourists including streamlining visa procedures have paid off, with arrivals increasing in Chile, Peru, Mexico and Columbia by 20 percent and more gains expected in 2017.

While China’s tour operators prepare to launch into a new tourist hotspot in Panama, the only Taiwanese company organizing tours to Panama has cancelled all of its scheduled tours to the country. Panama severed its diplomatic ties with Taiwan on June 12 as a condition of establishing relations with China.

Pro Tour Taiwan Inc. has stated that following the incident, local tourists started to cancel their reservations prompting a final decision to end its tours, which amounts to one group of about 20 tourists per month. The group says it was willing to absorb the costs “out of patriotism.”

With Panama's decision, there are now five Central American countries left giving crucial support and international legitimacy to Taiwan.

"Latin America is still a stronghold for Taiwan," Margaret Myers, director of the China and Latin America program at the Inter-American Dialogue think tank in Washington, told AFP.

"But the numbers are dwindling and it seems that many countries are coming to the conclusion that strong ties with Beijing in order to attract investments and improve trade ties, is perhaps in their best interest."

Panamanian President Juan Carlos Varela on Wednesday defended switching recognition to from Taipei to Beijing, adding he looked forward to China "bringing a lot of investment" to his country.

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Editor: Edward White