By David Lager
Last month, 11 Langone MBAs and five MBA2s spent six days in Panama City, Panama for the elective DBi course Operations in Panama: A man. A plan. A canal. Panama. Taught by Professors Harry Chernoff and Kristen Sosulski since 2012, the course was inspired by Chernoff’s investment in the Tantalo Hotel, a 12-room boutique hotel with a rooftop bar in the city’s historic Casco Viejo district.
Over the week, we learned about the process of transporting goods between the Pacific and Atlantic Oceans via the Canal along with a primer on real estate development and entrepreneurship in Panama City. To make the trip more interactive, each student wrote a pre-trip paper on a specific site we would visit complete with a quick talk about our topics before meeting with a series of guest speakers. We had first-hand access to ask any question on our mind, short of what it would cost to buy back the Canal from Panama.
In the evenings, we frequented the Tantalo Hotel rooftop for dancing and drinking. The Oppy’s very own editor-in-chief Deirdre Keane followed these evenings with an early morning run in preparation for the LA marathon and a protein packed breakfast in the Tantalo’s dining room.
Early in the trip, we met hotel manager Lorenzo Robles, who briefed us on the development of the hotel and the challenges that come with running a small business in a country with stringent employment laws. Continuing on the theme of hospitality and real estate development, the group also spent time with K.C. Hardin, a Florida native and trained attorney who flocked to Panama on a gap year between leaving big law in NYC and starting the real estate investment group Conservatorio.
Through Conservatorio, Hardin purchased The American Trade Hotel, a 50-room property located on a UNESCO World Heritage Site in the Casco Viejo District in 2007. The hotel was restored and reopened in 2014. It also features a continental restaurant, where the group dined together one night. Through this tour and talk, Hardin also showed the group the residential developments his company has been pursuing to create condos for middle-income families in a sustainable manner. Hardin also hit on the theme of Special Economic Zones (SEZ), which have been prevalent in helping create innovation and new business development within the country. To cap off the hotel development part of the trip, the group also received a tour of a yet to be opened Hyatt, Hotel La Compania, also located on a UNESCO World Heritage site.
Over the week, the group also visited SEZ City of Knowledge, a 300-acre campus that initially belonged to the U.S. Army during America’s control of the Canal Trade Zone. The area was eventually turned over to the Panamanian government and a private organization, which ultimately created a campus that includes an entrepreneurship accelerator and an innovation hub to bring scientists, academics and other business people together in one community. The SEZ also has residential apartments and homes for those working in the community.
In addition to learning about entrepreneurship and real estate development in Panama, the class also visited two of the Canal Locks, the Gatun Locks and the Cocoli Locks, newly expanded locks that were completed in 2014 in order to maximize the size of ships, cruises and sail boats that are able to cross the Canal. The class included two engineers, who both taped a cruise ship and shipping vessel passing through the lock and being raised and lowered through the use of gates to help the ship go from the Pacific Ocean to the Atlantic. Others like myself timed how long the boats spent in each of the locks to confirm our analysis we had done pre-trip on how many boats can pass through the canal on a given day.
In addition to viewing the two locks, the group also visited Manzanillo International Terminal (MIT), a shipping and loading area located near the Atlantic opening of the canal. Various managers at the terminal gave a series of lectures to the class on its operation, while the group also took a bus tour to see how various shipping containers were moved and loaded onto ships.
While the course featured extensive academic excursions, the group also bonded by exploring Panama’s nightlife. Three students, including myself, searched the various casinos in downtown Panama City for an open craps table after a lesson from Prof. Chernoff. Unsurprisingly, we had also been students in Prof. Chernoff’s Operations in Entertainment: Las Vegas course this past January. After failing to convince the Casino staff at Marriott Sortis, our hotel during the final two nights of the trip to open the Craps table, the team had to settle on Canal 21 Blackjack, Panama’s version of blackjack which has some slight variations of the traditional game played in Vegas. It was not the most successful gambling adventure, but on the final night of the trip, I managed to make back my early trip losses, though we did have to surrender 5.5% of our chips to the casino as part of a nationwide tax.
Overall, this trip brought together a wide range of topics in strategy and real estate, and it showed us what’s possible if you just look where others haven’t. Operations in Panama was an education in the possible. The weather wasn’t bad either.
