Trendsetters in environmentally responsible real estate development are discovering the many benefits of constructing low-density resorts in emerging markets like Panama.
Some savvy resort developers are responding to recent customer demands for exceptional natural experiences without sacrificing profitability. The key is emerging markets. Mature tourism markets have high land prices that make low-density development an unprofitable option. This results in higher-density developments, like high-rise beach hotels, which don’t offer the seclusion many travelers demand. In contrast, low-density development is easy to accomplish in a destination like Panama, which is just recently emerging as a tourist destination and where land is still inexpensive. “There is pressure to discover the new location, to find the unspoiled beach and create value and outperform the market,” said Liam Bailey, head of residential research for Knight Frank, in a recent New York Times article.
“Land prices in first-tier markets are such that developers are forced to cram 20-40 units per acre at least, or else build ultra-luxury products that only a fraction of a percent of the population can afford,” says Ben Loomis, President of Amble Resorts, an ecologically sensitive real estate development company. Loomis is preparing to break ground next year on The Resort at Isla Palenque, a private, environmentally friendly island resort community located in Panama’s Gulf of Chiriqui.
Popular eco tourism destinations like Costa Rica became well-known by offering secluded, natural experiences, but are now too mature to make that profitable. “Land prices there quickly reached the point where you have to build 7-story buildings to make the numbers work,” says Loomis. “By buying our island in Panama before the area became well-known, we were able to achieve a price that will allow us to keep the majority of the island as a nature preserve and develop at densities of less than one unit per acre.”
Low-density resorts do more than offer premium experiences for their customers and profitability for their investors, they are more sustainable. In a recent study on Low and Medium Density Development, Landscape Architects Wes Michaels and Ebru Ozer found that, “Mid-sized resorts offer more opportunities to balance the demands of resort tourism with the environment and the cultural needs of the local population… The environmental savings are also beneficial for the economic vitality of the individual resorts as well as the long term sustainability of the entire region in relationship to tourism.” Responsible developers agree. “What’s really great is that we can have a much more beneficial impact on the local community,” says Loomis.