GALILEO UNIVERSITY

FISICC-IDEA

CEI Liceo Guatemala

Degree Name: Bachelor's Degree in Technology and Administration

Course: Economic Analysis of the region

Hours: Saturday 7:00 – 8:00

Final Investigation
WEEK 9

Surnames, First Names of the Student:

Roldán Juárez, Gerson Obed

Meat: IDE 12270014

Introduction

This work explains the importance of tourism in Central America since it is one of the main
sources of income in most countries in the region.

There are many tourist destinations that we will find in Central America, first-class tourist
destinations, cultural, sports, adventure and, above all, nature tourist destinations. Central
America is a region that offers a wide range of activities and places to visit.
Central America: where investment in
tourism should go
Central America has unmatched natural beauty to offer alternative tourism. Fishing in
underexploited fishing grounds is what anyone who prides themselves on having a good nose
for business should do.
In terms of tourist investment, it seems that these fishing grounds can be found in the Isthmus
in the waters of specialized tourism, which can range from educational (archaeological,
cooking, music), to adventure, including diving or artisanal tourism. .

Finding their niche to survive the tough competition is what the countries of our region have to
do, because the networks of investors are attentive to casting them in the multiple fishing
grounds that are distributed throughout the tourist waters, worldwide.

Tourism numbers have returned to normal after the 2008 crisis, “but tourists are the ones who
have changed,” says Roberto Ponce, manager of Invermaster, a consulting company in
investment strategies and venture capital.

Just look at the statistics from the Central American Tourism Council (CCT): daily spending per
tourist in the region fell below US$100 for the first time since 2007, and the average stay
remains around nine nights.

“Traditional post-crisis tourism is not so interesting for the investor, we have to offer
something more,” says Ponce.

Initiatives announced a few years ago, such as health tourism, have not taken off in Central
America and growth is seen in business tourism (with the clear leadership of Panama, which
thanks to this takes the lead in average spending, which It reached close to US$200 in 2011,
and in 2012 it closed at US$136, well above the US$98.6 in the region).

And what can the investor interested in putting his money in tourism do? Ponce has the
answer: “Evaluate and actively seek investments from people that generate different things,”
and he cites educational tourism (archaeological, musical, cooking); adventure (rafting,
canopy, aerial trams, catamaran, fishing); rural community tourism; artisanal…
In the investor's opinion, there will be both big winners and losers. The key to all these
investments will be the quality of service. The risk is great, because many of these ventures are
still incipient and one-person. “The investor's challenge is to bet on the most educated and
those with the greatest power. It is very similar to investing in technology.”

This investor is private, pension funds or banks do not enter; due to the high risk they entail.

But why invest in tourism now? Simple, because we are in the middle of the recovery period
Casting nets in many places and hoping that some of these fishing grounds will explode is the
bet, many investments of low amounts to diversify the risk, thinking about long-term returns.

The advantage, in this case, is that the investment is much less than in traditional tourism and
the return is much greater, generating more value and recovering the investment in less time.

In traditional tourism, the expert assures that the initial contribution does not go below US$20
million, while in alternative tourism this figure would range between US$3 million and US$7
million.

And as for the rates of return, in the new modalities they are beyond 20%, with lower debt
(40% debt, 60% capital); compared to the return of 12% to 14% that traditional tourism gives
(which also raises the debt percentage to 70%).

In the opinion of Roberto Ponce, Central America must generate destinations beyond the sun
and beach; which has given such good results so far, but which is already showing signs of
exhaustion

And hotel occupancy decreased between 2011 and 2012, going from 56% to 54.7%, according
to data from the CCT. It is a sector that must be pampered, since in recent years it has
accounted for around 6% of the region.

The type of tourism that Ponce aims for, the specialized one, is by definition not massive,
giving opportunities for small companies to emerge. “Large companies concentrate on mass
tourism, it is the coasts,” says the expert.

What can we offer?

To begin with, the region must provide greater security in many areas to the investor: social,
environmental, legislative... We know that money is fearful and everything must be supported.
The tax benefits given to them matter little if there is no legal certainty.

It does not seem that Central America is selling well in terms of tourism, for those who put in
the money. “Our countries continue with the message towards the tourist, not the investor,”
comments Roberto Ponce.

What are the competitive advantages? Well, Panama is “very friendly” in all aspects of permits
and regulations, while at the other extreme are Honduras and Guatemala.

Essential are the flights that each destination has, with countries competing with each other,
inside and outside the region. “Everyone is competing well on the issue of airports,” says
Ponce; However, the absorption of Taca by Avianca “has been negative in this aspect, for
Central America,” explains the Invermaster manager, due to the disappearance of air
frequencies, who also points out the high cost of internal flights as a critical element that
makes it difficult regional tourism, or sales as a multi-destination in Central America. “It is the
risk factor that unifies the region,” he concludes.

The already announced arrival of various low-cost airlines, with some already in operation (see
edition 166 of E&N, Low-cost airlines take off in Central America) can reduce this risk, by
increasing the possibility of tourist arrivals, but it will also change, as lower your profile.

According to Hermes Navarro, leader of Macroprocess of Tourism Management and

Consulting, of the Costa Rican Tourism Institute (ICT), the success of Costa Rica as a
headquarters for tourism investment is based on an image developed, from a series of efforts
in different areas, which positions it as a good investment destination internationally.

“Costa Rica's political and economic stability are two more competitive elements of its value
proposition to the investor,” he says.

The hotel segment continues to be the most attractive for tourism investment in the country,
with projects from large hotels to small boutique hotels, aimed at a very exclusive segment.

According to the president of the National Chamber of Tourism of Costa Rica (CANATUR),
Isabel Vargas, conditions seem to gradually recover from the years of crisis experienced; But
he highlights that there are pending issues that the next Government must change to make
the country more attractive in the development of investments in the tourism field, such as the
reduction of the "red tape phenomenon."

In addition to consolidating its star product (adventure and nature), the country must promote
the growth of other niches, such as tourism aimed at senior citizens, wellness and health.
It visualizes opportunities for community-based rural tourism, the development of marinas and
leisure at sea in a sustainable manner, as well as in the congress and convention segment.

Panama has gained weight as a tourist destination and for investment of this type in recent
years. The vice minister of the Panama Tourism Authority (ATP), Ernesto Orillac, explains that
this development has been one of the fundamental pillars of management of the current
Panamanian government Tourism is among the four most important industries in the country:
it represents about 10% of the national GDP.

The growth in tourism infrastructure is taking place mainly towards the Pacific area and the
beaches, and whose opportunity is important with the opening of a new international airport
in Río Hato (Coclé province, to the southwest).

Orillac also considers important the development of a new highway in the Caribbean,
bordering the coast, which will open up tourism projects that were left behind in the past due
to the lack of connectivity.

The official believes that there are investment opportunities related to tourism in hotel
infrastructure, in tour-operation of destinations, or nautical transportation (Las Perlas
archipelago, in the Pacific, for services such as ferries).

Orillac highlights the tax incentives law of December 2012, to attract investment, and for
initiatives outside of Panama City.

The main limitation that is being worked on is the achievement of qualified technical human
talent for the sector.

Guatemala is growing in the tourism sector, but the latest survey in this sector by the
Association for Research and Social Studies (ASIES) indicates that the use of the installed
capacity of hotels does not encourage investment; But over the past five years, the average
hotel occupancy rate has been around 49%. “It has not been possible to obtain the expected
returns on the investments made in 2008,” asserts Sandra Muralles, vice president of the
board of directors of the Guatemalan Chamber of Tourism (Camtur).

In Muralles' opinion, Guatemala is in a still incipient stage of developing policies to attract

investments for the tourism sector, with an obsolete law (dating back to 1967) “that at this
moment hinders the promotion of tourism,” says Muralles. Camtur has proposed one with
reforms to this organic law.

“Consolidating tourism as the articulating axis of the sustainable development of Guatemala is

the great challenge,” says the vice president of Camtur. This was raised in the National Policy
for Sustainable Tourism Development 2012-2022.

Pedro Duchez, director of Inguat, assures that “we have given ourselves the task of bringing
more cruise lines, bringing more ships, more airlines. That is also an investment in our
country.” The result is more foreign exchange and more tourists in 2012 and 2013.

In addition to the consolidated ones, Duchez sees an opportunity in adventure tourism and
cultural tourism, “both ancient Mayan culture and living culture.”

El Salvador has a great tourism strength in its beach sector but, for the Project and Investment
Manager of the Salvadoran Tourism Corporation of El Salvador, Martha Cristina Molares, there
are other areas that are being heavily invested in: volcanoes, coffee, underwater archeology
and cruises.

With respect to GDP, tourism income in 2013 exceeded the forecast of the Ministry of Tourism
(Mitur), reaching US$904.28 million (around 3% of GDP).

Currently, the star product is surfing, but it is being combined with more adventure products
such as “climbing mountains or doing outdoor activities, kayaking, coffee tourism and the case
of Boquerón, which is a connection with the business tourist who "He is moving to take
advantage of the afternoon of the convention," says Molares.

There are advances in underwater archeology and strong interest from Brazilian and European
tourists in the Monseñor Romero route.

It should be noted that work has been done on a reform to the Tourism Law for investments of
US$25,000 and up, lowering the ceiling to encourage investors.
In Nicaragua there are 852 hotel facilities, of which 70 are from one to five stars. The hotel
infrastructure is small and medium.

“It is still large companies that have access to tax exemptions, something we want to reverse,”
says Leonardo Torres, president of the Nicaraguan Chamber of Tourism for Micro, Small and
Medium Enterprises (Cantur), which brings together 3,500 companies.

So far in 2014, the Nicaraguan Institute of Tourism (Intur) reports investments in the order of
US$46 million “and we hope that US$100 million will be approved at the closing,” says its
president, Mayra Salinas.

For Torres, the new law 306 (Law of Incentives for the Tourism Industry) “is extremely kind”,
since it establishes exemptions from all VAT, from introductory taxes for the ten years that the
project lasts, etc.

The advantages of investing in the country are its legal security, the low value of the land and
the natural sources for tourism promotion.

“There is a lot of interest, in addition to the traditional sun and beach, in experiencing and
living the living cultures that characterize us; sustainable rural tourism; agrotourism…”, says
Salinas.
Nicaragua also has filming projects, La Isla for example, which is going to start in San Juan del
Sur, and Survivor arrives again.

In Honduras, investments in tourism development are diverse, say the Chamber of Tourism of
that country, from which the Tela Bay golf course and hotel stand out, soon to be inaugurated,
with its new Indura brand, the dock Trujillo cruise ship, the Holiday Inn Express hotel in
Tegucigalpa, among others.

For Ricardo Martínez, director of the National Chamber of Tourism of Honduras (CANATURH),
Honduran potential occurs mainly in areas that aspire to attract international tourism of
medium to high purchasing power: “The Caribbean area is the one that greater hopes for
development awaken, but Copán Ruinas, with its Archaeological Park, also has a privileged
place when it comes to investing.”
Multiple examples
According to Hans Pfister, president and co-owner of Cayuga Collection, a company dedicated
to the administration and development of eight sustainable luxury hotels in Costa Rica and
Nicaragua, when you manage to be in the sustainable luxury hotel segment, there is good
demand. on the part of the client “and, if you do things well at the operational level, you can
do very well.”

Although Cayuga Collection does not invest but rather manages hotels, Pfister says its clients
have invested more than $70 million and are currently developing a new hotel for a client in
Nicaragua.

The Hotel Las Lagunas, in Petén (Guatemala), is on the shores of the Quixil Lagoon. It was built
by the Sociedad Nietos de Bernal SA “The idea of the owners was to share the beauty of the
place by building a hotel so that the visitor would feel comfortable and with all the current
needs of the best hotels, which would fill a quality space for the demanding traveler in an area
where this quality did not exist,” says its owner, Edgar Castillo Sinibaldi.

Real Hotels and Resorts is the hotel division of the Salvadoran corporation Grupo Poma, which
operates, franchises and owns 27 hotels in Central America, the United States, Panama, the
Caribbean and Colombia. At the recent opening of The Market restaurant at the
Intercontinental in Guatemala, its vice president, Fernando Poma, explained that to enhance
the country's image, he put international brands in tourist attractions: “Antigua, Río Dulce,
Panajachel. It is interesting that in many of these places there is still no presence of
international brands.”

Raúl Calvet, from Calvet & Asociados, says that the new Holiday Inn Express in Managua has an
estimated investment of US$13.8 million. This hotel is aimed at businessmen looking for a
hotel with the basic services they need: high-speed internet, quality rooms and a good
location.

In 2007, a group of 46 Honduran businessmen undertook the largest unified investment in

Honduras, the Indura Beach & Golf Resort; The first phase of it demanded US$22 million in
what, to date, is the most important tourism plan in the history of the country. These 46
businessmen are organized in the Honduran Tourism Investment Fund (FHIT), while the
government, through the Honduran Tourism Institute, has joined them in the Tela Bay Tourism
Development Society (DTBT), owner of the complex.
Investor networks are ready to throw them out. The most daring will be those who manage to
launch them in the right fishing grounds.
E-graphy

http://www.estrategiaynegocios.net/lasclavesdeldia/698251-330/centroam%C3%A9rica-hacia-
d%C3%B3nde-debe-ir-la-inversi%C3%B3n-en-turismo

http://centroamerica.costasur.com/es/destinos-turisticos.html