South Florida faces a rising rival in tourism: Panama.

Investors are pouring hundreds of millions of dollars into hotels into the small Central American country, which posted the fastest growth in international arrivals in the hemisphere last year: up 30 percent to 1.1 million.

Some now dub the tropical nation, long known for its canal and banks, the "new Miami" and hottest spot for new hotels outside the Middle East's Dubai.

Panama competes with South Florida largely for visitors from nearby South America and the Caribbean, including many interested in waterfront condo-hotel units. It also lures some U.S. travelers and retirees who like its use of the dollar and proximity, less than three hours' flight from Fort Lauderdale.

Florida companies are cashing in. The Seminole Tribe's Hard Rock International plans its first Latin American hotel in Panama. Miami-based Nikki Beach Hotels & Resorts plans an oceanfront resort and a city tower. Plus, Florida designers, architects and other service firms are working on projects in the tropical nation of 3.2 million residents.

Spurring growth are several factors: recent Panama incentives to encourage hotel investment; the $5 billion expansion of the Panama Canal; costs and taxes lower than South Florida; and increasing air and sea links for travelers.

Panama also is gaining from tough U.S. security rules after Sept. 11, 2001, which make it more cumbersome for foreigners to obtain U.S. visas and cross U.S. gateways.

"A lot of our international customers refuse to come to the United States now because of the hassles. It's so much easier to get into other countries," said Gary Sims, president of Nikki Beach Hotels, which has no hotels planned to date in the U.S.

Just three years ago, few would have predicted that Panama would come on so strong in tourism. But a 2006 vote for a massive canal expansion and government incentives helped fuel a real estate boom, including luxury towers in the capital with condo-hotels.

Panama became so vibrant that hotels could not keep pace with demand, especially from business travelers.

City hotels that averaged $120 a night three years ago now run $170 a night or more. And occupancy at top-tier hotels jumped from less than 70 percent to roughly 85 percent, with rooms often full weekdays, said Rogerio Basso, a hospitality analyst at Ernst & Young in Miami.

At least 8,000 new hotel rooms are planned, most in shopping center-studded Panama City and on Playa Blanca beach on the Pacific coast. That's about 50 percent more rooms than Panama's current tally — or an increase equal to about one-fourth of all the hotel rooms now in Broward County.

Still, Panama remains relatively small in tourism. Even with double-digit growth again this year, it attracted fewer than 800,000 air and sea arrivals in the first half. That compares with more than 7 millionguests who stayed overnight in Broward County in the same period.

Panama also faces challenges to sustain its rapid growth. Roads and infrastructure lag, with traffic already a problem in the capital. New luxury hotels must focus on employee training. And analysts question whether the country can attract enough upscale guests to fill the many luxury hotels proposed, including the first Buddha-Bar Hotel & Spa in the Americas, linked with the Paris nightclub.

But hoteliers such as John Issa of Jamaica's all-inclusive chain SuperClubs, now opening his first Central American resort on Playa Blanca, see opportunity first.

"Panama is becoming a sort of crossroads" luring North, Central and South Americans and increasingly, Asians doing business in the hemisphere, Issa said. That's much like South Florida, which bills itself the gateway to the Americas.

By the numbers

8,000

85%