Panglao has become a Tourist Zone by Proclamation No. 1801 (VII) dated November 10, 1978. The same town was under the Integrated Protected Areas (IPAS) under Proclamation No. 2152 dated December 20, 1981 of the DENR with an area of 8,740 hectares declared as Mangrove Swamp Forest Reserves.

In 1999, Panglao had forty-one (41) resort establishments with 153 resort units of varying standard. Foreign guests came mainly from Europe, one of which is classified as AA resort and one as Special Interest Resort (SIR), while the rest were of different standards. Foreign visitors in this town comprised a majority of 54 percent of total visitors. Among foreign visitors Europeans ranked first followed by Asians.

These resorts provide island hopping tours, scuba diving, snorkeling and visits to Balicasag Island, leisure games. Restaurants, bars and souvenir shops are common to resorts while only class AA and some class A resorts have swimming pools and sauna baths.

Inadequacy of infrastructure facilities affected the tourism development of the town. The lack of potable water supply is a major problem among foreign and domestic visitors. They rely on bottled water for drinking because of the salinity content of water from pumps and wells in resort areas. The local waterworks system has limited supply and cannot serve all resorts and the populace.

It needs communication facilities such as telephone lines to serve tourists in resort areas as well as local residents. Resort owners usually provide their own local communication system which have limited reach and not serviceable to tourist and residents of the area.