Panama Canal
Cargo ships wait in Panama Bay for transit through the Panama Canal. Agustin Herrera/Associated Press

Panama on Tuesday inaugurated a new cruise ship terminal at the mouth of the drought-hit Panama Canal, hoping to attract more tourists to the Central American nation.

The facility in Panama City was built by a consortium led by China Harbor Engineering Company with an investment of more than $200 million, according to President Laurentino Cortizo.

"The cruise terminal will generate new tourist routes... attracting more visitors to our country," Cortizo said at an opening ceremony.

The terminal, which will be able to receive two cruise ships at a time, is the first on Panama's Pacific coast.

Another operates in the Caribbean city of Colon.

Panama received nearly 320,000 visitors on cruise ships in 2023, double the previous year, according to Denise Guillen of the Panama Tourism Authority.

"The growth is exponential," she said.

The opening comes as authorities confront record-low water levels that have limited the number of ships able to transit through the Panama Canal, which usually handles about six percent of global maritime trade.

Canal administrator Ricaurte Vasquez said last week he hoped that traffic would return to normal by next February.