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TOURISM and STATISTICS

THEOROMETRY
THE SAVIOR

EXECUTIVE REPORT

ALEJANDRO GOMEZ LARA,


UNWTO Consultant
December 2012
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Preamble: ..……………………………………… ……2


Introduction…………………………………….…………….4
Media importance of statistics…………….6
History of statistics… ………………… 8
Statistical data of El Salvador……………………9
History of Tourism……..………………………… ……12
Concepts ……………………………………………..13

Statistical study of Tourism……………………….16


Difficulties in preparing statistics 19
World Tourism Statistics UNWTO… 21
Tourism Statistics in El Salvador …… … ….30
Movement of tourist flows ……………….. 31
Evaluation of tourist flows……………… 33
Average spending ………………………………….. 36
Balance of payments and Tourism……………… 38
Capital Flight …………………………………… ……43
Results……..………….…………. …… ………45

PREAMBLE

As I write these lines, the Director of an important institution of the


Judicial Branch is removed from his position for disclosing
statistics... yes, statistics have the disadvantage of being
manipulable. When the population is unaware of these records, how these measurements are taken or the
criteria for tabulating the data, the ability of some unscrupulous officials, as in the case I point out, to lie with
the figures to the population to whom they swore weighs more. serve at the time of being invested in their
positions, that the truth of the facts as such: the statistics...
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Alejandro Gomez. Consultant,
e-mail: alexgo@navegante.com.sv .
Tourism is no different, as a study phenomenon that it is, it has been necessary to measure its impact in the
different areas it affects. Namely, it is a mainly economic phenomenon and as such its impact is reflected in
the foreign currency income that is generated in the destination country for this item.

The state, understood as the institutions that receive taxes from companies dedicated to offering tourism
and hospitality services, pay their income taxes and VAT, which allow the state to operate. Added to these
are the local or municipal rates and taxes paid by establishments in the places where they operate.

On the other hand, as a phenomenon that triggers the economy, it generates direct jobs which in turn have
to directly impact the socio-economic development of the populations that receive its benefit, and on the
other hand, indirect jobs, which are no less important. , there are a much larger number of families that
benefit from the arrivals of foreigners to the country.

The stone in the shoe then is the word foreigners in the preceding paragraph. It would seem that talking
about a foreigner is synonymous with a tourist, but it is not. They are the discrepancies in the handling of
statistical data

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Alejandro Gomez. Consultant,
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of entries/exits of foreigners and/or tourists which commit us to the public who must receive the truth of the
records.

Since my student days, theorometry has been a matter of interest, all the work in our world of tourism and
travel only makes sense and explanation at the moment in which what we do is quantifiable, based on the
number of new foreigners bringing their fresh dollars to the country (currency), and that is the main
difference. Dollars that cost the country nothing more than their retention and distribution in the national
economy.

Under these premises, I participate in the preparation of Tourism statistics bulletins as a UNWTO
Consultant, reporting the trends of the migratory movement and the tourist phenomenon in El Salvador,
based on statistics from different sources, both official and union sources. , and this is what now moves me
to explain in a little more detail the criteria used to measure the phenomenon.

It is necessary to highlight that it deprives scientific knowledge of the appreciations or evaluations that can
be made of the phenomenon, mainly in a country like ours, where for many years it was attempted to justify
the budget assigned to the governing institutions of the phenomenon, ...without actually there is…

With my respects, Sincerely


Alejando Gómez L OMT Consultant.

WORLD TOURISM
ORGANIZATION

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Alejandro Gomez. Consultant,
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Introduction

The topic of statistics is dry, we like it when they are presented already graphed, but not in the stage of
capturing, tabulating and interpreting the data, and although statistics surround us in our modern world, we
are not lovers of numbers, but As far as tourism is concerned, beyond the romanticism, what really counts is
how much it leaves and that is its importance, quantifying the inflows of tourists and the income in fresh
currency that this means for the national economy.

Tourism has been defined in different ways, but in its essence it is an economic phenomenon of a social
nature, with which the development of activities that make a visit unforgettable is sought as indispensable,
for the person who is motivated to visit a place. tourist or attractive destination, in order to recreate, have
fun, negotiate or execute any purpose that has been proposed to be achieved for said trip.

This review seeks to explain in a simple way (not because they are), the differences that exist in countries
that make the practice of tourist activity a reality with respect to El Salvador, its statistics and the
consolidation of these figures that reflect preferences and trends towards El Salvador as a destination, and
how these can guide the viability of tourism as an enhancing element for the sustainable development of the
country.

The purpose, in accordance with recommendations of the United Nations, and specifically the World
Tourism Organization in the preparation of tourism statistics, seeks to measure spending on tourism and
hospitality activities, in such a way that allows this information, guide plans, policies, strategies and
resources for better use of flows and their demand for services in destination countries. Hence, the concepts
and ideas have as a common source the information from the UNWTO, plus the experiences of our country
and Central American region with its peculiarities.

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Some of this information is public and freely distributed by the Ministry of Tourism and Corsatur (Tourism
Statistical Report, Market Intelligence Unit).

This tool is for public use and must be managed by decision makers, both public and private, in order to
make their activity transparent and make the best use of state resources as possible.

I have included some basic concepts about balance of payments and capital flight , given that the impact
these have on the economy of a country are determining factors for the development of an area as important
as Tourism.

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Media importance

The data published by CORSATUR / MITUR reflects headlines such as:

“..EL SALVADOR RECEIVES 77, 100 INTERNATIONAL TOURISTS, A RETURN OF 13%, ON


HOLIDAYS EASTER WEEK 2012…”
Income from international tourism left an economic impact of 39.1 million dollars, reflecting a growth of
27.0% compared to the same holiday period of the previous year.

The statistical data also reveal that the participation of tourists from Guatemala represented 68.9%,
followed by Honduras with 21.5% and Nicaragua 5.4%, respectively.

The Ministry of Tourism exceeded growth expectations during the Easter holiday season, held from
March 31 to April 8, 2012, obtaining a 13% increase compared to 2011, receiving a total of 77,100
international visitors. , leaving an economic benefit of 39. 1 million dollars, compared to the same
holiday period of the previous year, by entering 30.78 million dollars in foreign currency.

The head of the branch, José Napoleón Duarte Durán, reported that El Salvador received a total of
17,784 more tourists by air, showing an increase of 86.63%, and 59,316 tourists entered by land,
compared to the same season last year. .

During the Easter holidays, 4,612 Salvadorans residing abroad arrived by air, which represents
26%.

“This 13% increase is due to the national and regional promotional campaign “Get closer to El
Salvador”, which was launched with the aim of attracting tourists to the country. In economic benefits
this digit

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It meant a total of 39.1 million dollars received in foreign currency income from tourism,” the official
stressed.
The statistical data also reveal that the participation of Guatemalan tourists left a balance of 68.9%,
followed by Honduras with 21.5% and Nicaragua with 5.4%, respectively. It should be noted that 61,973
Salvadorans preferred to go on vacation outside the country.

The average expense of an international visitor is around $89.0, while the average stay is 5.7
nights.

According to surveys carried out by technical staff of the Salvadoran Tourism Corporation (CORSATUR),
hotel occupancy was between 86% and 95% in the Sun and Beach segment, mountain hotels between
78% and 89%, in rural hotels the behavior between 67% and 69%, respectively…."
( http://www.corsatur.gob.sv/novedades/noticias/item/22-el-salvador-reci-77-100-turistas-internacionales-
un-repunte-del-13-en-vacaciones-semana-anta -2012.html )

As we can see, statistical data are basic to measure not only the effects of the tourism phenomenon as
such, but also the performance of the authorities and the different sectors that carry out promotional activity
and provision of tourist services... but something is not right here... The figures create expectations in
businessmen in the sector. The unions complain because they DO NOT know where the reported “ tourists ”
are, the Hotel Committee does not register them as guests in their hotels and the average expense they are
talking about has not been received… but it is important to highlight that the tourists are not only They stay
in hotels…

Given this discrepancy, it is important to analyze how we make statistics and how we interpret them ,
otherwise we will inevitably fall into the same case of the Ministry of Public Security and the Institute of Legal
Medicine, both talk about statistics, except that the latter has the evidence... . The same applies to the
Ministry of Tourism and the Hotel Committee, and likewise, in our case the registration of guests in hotels
weighs more, because for them, it is evidence...

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History of statistics

Statistics is about much more than cold numbers in endless tables or pretty graphs. It is as old as writing,
and is itself auxiliary to all other sciences, all other sciences being its clients.

What is statistics?

“… Statistics is the science whose objective is to gather quantitative information concerning individuals,
groups, series of events, etc. and deduce from it, thanks to the analysis of this data, precise meanings or
forecasts for the future.

Statistics, in general, is the science that deals with the collection, organization, presentation, analysis and
interpretation of numerical data in order to make more effective decision-making...

The basis of statistics is the knowledge of the universe, understood as the population that needs to be
represented or about which information needs to be obtained. This knowledge is diversified in terms of its
structure or stratification, as well as the variation of the data recorded over time. In our case, the
CORSATUR/MITUR records record this universe as travelers entering through land borders and the
international airport, to this we add the records reported by the marinas, which CORSATUR has not yet
added.

Because we do statistics

Statistical methods are traditionally used for descriptive purposes, to organize and summarize numerical
data. Descriptive statistics, for example, deals with the tabulation of data, its presentation in graphic or
illustrative form, and the calculation of descriptive measures.

These statistical techniques are widely applied in different areas of knowledge, and together with meticulous
observation and

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organized, they are the basis of the scientific method, it is used in almost any human activity and serves (or
at least we would hope so) people who intervene in decision-making.

The understanding of the development of a country can only be expressed clearly to the extent that the
figures of our reality are present and it is on them that we must act, both from the public and private spheres,
since the responsibility for development is shared. .

Statistical data from El Salvador.

Employment , in the last three years, grew from 681,725 (May 2009) to 770,457 (Sept 2012), that is, 88,732
in the period (source ISSS), very far from the set goals of 250,000 jobs.

Average salary in El Salvador is USD$434.12, however the average salary in the tourism sector is
USD$446.30. The real salary of the majority of the population, however, falls from USD$277.63 (2009) to
USD$270.69 (2011) (EHPM)

Monthly family spending falls from USD$402.8 (2008) to USD$360.00 (2011), that is, 10% compared to
inflation of 7.3% for the same period, that is, there is a purchasing capacity reduced by 18%.

The poverty rate increased in the last year by 4.1 points, that is, we have 70,000 more households in
poverty.

The tourism sector employs about 44,000 workers, of which 51% are absorbed by food and beverage
establishments (restaurants, bars, hotels).

El Salvador has a Human Development Index of 0.659, which places it as a country with medium human
development. El Salvador occupies position 90 in 169 countries studied, compared to Costa Rica, which
occupies No.62.

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Regarding life expectancy for Salvadorans, the report highlights that it is 72 years, while the average years
of education are of 77.
http://www.archivocp.contrapunto.com.sv/pobreza/el-salvador-en-position-90-del-indice-de-desarrollo-
humano-del-pnud .

Meanwhile, in the Tourism sector, data such as:

“…he highlighted that in 2011 the percentage of income generated by the tourism sector in El Salvador
increased 18.3% compared to 2010…” “…the above represents income of $615.1 million. In 2009, an
income of $516.9 million was obtained and in 2010, $518 million dollars….”

“…One of the factors that has contributed to this growth is the implementation of the “open sky strategy”
promoted by MITUR for the development of tourism in the country. From 2009 to 2011 it has grown by
10.1%…”

“…the places of origin of the tourists who visited the country are experiencing a growth in demand from
Europeans; This reports a growth of 70.1% since in 2009 the visit of 19,919 tourists was recorded and in
2011 it was 33,891, among these the flow of South Americans increased by 40.3% in 2011. 33,249 people
arrived….”

“….he pointed out that these 615.1 million represent 2.9% of the Gross Domestic Product (GDP) and
highlighted that these incomes represent a positive impact on the national economy….”

“…he highlighted that the average daily expenditure of a foreign tourist for 2011 was approximately $103,
which contributes to improving the profits of the national economy….”

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“…As for domestic tourism, statistics record approximately five million people who visited the different parks
of the Salvadoran Institute of Tourism (ISTU), which generate funds of 114 million dollars. In total, tourism
for 2011 generated 729 million of Dollars…."
http://www.diariocolatino.com/es/20120116/nacionales/99381/Turismo-en--El-Salvador-ha--crecido-en-un-
183.htm .

As we can see, statistics are basic for the interpretation of economic reality, so it is necessary to deepen our
knowledge, and the same figures serve different purposes...

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Alejandro Gomez. Consultant,
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HISTORY OF TOURISM

Although I have already developed these concepts in another document, we are going to lay the foundations
for a detailed study of how they are handled for statistical control purposes. See
http://es.scribd.com/doc/100621433/Turismo-Teoria-y-Tecnica and
http://es.scribd.com/doc/93047500/Turismo-Breve-Historia-de-El-Salvador . Which complement each other.

Tourism as such was born in the 19th century, as a consequence of the Industrial Revolution, with trips
whose main intention is leisure, rest, culture, health, business or family relationships.

The main difference from other migratory movements is their purpose, while other types of trips are
motivated by wars and the consequent displacements to other territories, migratory movements of conquest,
trade, among others and, as has already been seen, not There is a date that coincides with the starting point
of tourism as such.

CONCEPTUALIZATION OF TOURISM

Tourism is an economic activity of a social nature in which the development of activities that can generate an
unforgettable moment for human beings, who are motivated to visit a place, tourist destination or attraction,
in order to recreate themselves, is sought as an essential foundation. , have fun, negotiate or execute any
purpose that you have set out to achieve for said trip.

It includes "activities carried out by people during their trips and stays in places other than their usual
environment, for a consecutive period of less than one year, for leisure, business and other reasons."

It is important from the beginning to understand that not all travelers are tourists, and therefore the count
must be

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adequately tabulated to separate those who really entered for tourism, from the rest.

Concepts

Although in the documents referred to above (Theory and Technique of Tourism and Tourism, brief history of
El Salvador) the main concepts of this subject are explained. In order to facilitate understanding I include the
main ones. These are taken from UNWTO literature.

Tourism. “includes the activities carried out by people during their trips and stays in places other than their
usual environment, for a consecutive period of less than one year, for leisure, business or other reasons”

Tourist. “is a visitor who stays at least one night in a collective or private accommodation in the place
visited.”

Tourist spending . “is the total consumption expenses incurred by a visitor or on behalf of a visitor during
his or her travel and tourist stay at the destination.”

Depending on the traveler and their place of origin and destination, we can make the following
classification:

• Internal tourism (domestic ).- Residents of a country or area travel only within the area.
Economically, it affects the redistribution of income and job creation, but it does not cause the entry
or exit of foreign currency. “is a national or local visitor who stays at least one night in a collective or
private accommodation in the place visited.” It is important to highlight that in our country, given the
short distances, many travelers prefer to return to their homes after a visit, since even in the most
remote places from the capital city, the trip does not exceed three hours.

• Inbound tourism (inbound).- Non-residents who travel within a country or area. Economically it
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produces an influx of foreign currency (wealth from abroad). “includes people residing abroad who
visit a certain country”
• Outbound tourism.- Residents of a specific country or area who travel to a different one.
Economically it produces a loss of wealth because nationals spend their money abroad (we represent
40% of Guatemala's tourism income). “includes residents of a country who travel to other nations.”

Combined together, these three basic forms of tourism determine the following categories:

• Internal tourism (internal).- Includes internal tourism and inbound tourism.


• National tourism.- Includes domestic and outbound tourism.
• International tourism.- Includes inbound and outbound tourism. “is a foreign visitor who stays at
least one night in a collective or private accommodation facility in the country visited.”
• According to its duration and economic capacity

Depending on the duration of the trips, we can distinguish stay or residential tourism and itinerant tourism.

If the time that the trip lasts is very short in relation to the final stay at the destination, we have residential or
residential tourism. If the trip takes up most of the time (sometimes the trip itself is the purpose of the trip)
and there are hardly any stays, we speak of Itinerant Tourism.

Depending on the economic capacity of the tourist, we can distinguish between elite, mass and social
tourism.

• Elite tourism is that carried out by the upper classes, they are usually individual trips with high-level
services and remote destinations,

exotic, it is not subject to a vacation period and the average number of stays and frequency of trips is
greater than in the others, it tends to become mass tourism. It is important to highlight that this type of
tourism does not visit our latitudes.
• Mass tourism is carried out by the middle class, they are trips by collective means of transport,
accommodation is not very expensive and the level of spending is much lower than in the previous
one, they prefer closer destinations and frequently resort to "all-in" travel. included", this type is
subject to holiday periods and is the cause of summer crowds (Easter/August seasons). The most
visible example is that Decameron Salinitas manages its charter flights.
• Social tourism is the one with the lowest expenditure, it is usually group trips, outside the holiday
season and sometimes part of the trip is subsidized. It is what is done by the social classes with lower
income, such as retirees, students, and average workers.
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• Popular recreation , this is a concept that must be differentiated and about which the functions of
MITUR still need to be separated, since recreational parks ARE NOT tourist centers even if that is
their name or was the purpose of their creation .

Other concepts.

Visitor. “Any person who travels for a period not exceeding 12 months to a country other than that in which
he or she has his or her habitual residence, but outside his or her usual environment, and whose main
reason for the visit is not to carry out an activity that remunerated in the country visited.”

International visitor . “ any person whose country is different from the country visited; These include
nationals who permanently reside abroad. ”

Usual environment . “ It consists of the surroundings of your home and your place of work or study center
and other frequently visited places.”

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Internal visitor : “Any person whose country of residence is the country visited: they may be nationals of
that country or foreigners.”

Visitor of the day. “It is the visitor who does not spend the night in a collective or private accommodation
facility in the country visited.” They are also known as hikers.

Statistical study of tourism

In tourism, statistical information is essential for the adoption of any decision by those who must direct its
growth policy. It is quite complex and difficult to compare at regional and international levels, the different
circumstances and characters that typify and diversify the features of the different variables, then it is
necessary to address more defining elements, making comparisons more difficult. Our regional market
competes for the same guests, apparently on equal terms, but only apparently, the social and political
conditions of both Honduras and Guatemala are different, even though they share culture, race and religion.

We are talking about the same offer, except that in our case the depredation of natural resources takes us to
the brink of desertification, compared to the vast forested expanses of Guatemala and Honduras, the same
applies to colonial history and how traditional towns have been preserved. , or the Mayan culture itself, of
which we only have a sample, compared to the diversity and wide extension of archaeological zones of both
competitors. Given this weakness, it is necessary to know the preferences of travelers to enhance our
strengths, which must be the differentiating element compared to other countries in the region with similar
offerings.

It is from this point in particular where the urgency arises to improve statistics by objective groups:

• Basic objectives, the fulfillment of which would make the effective management of tourism activity
very difficult.
• Know the basic elements of the scenario in which the activity takes place and the evolution of the
variables.
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• Study the past and the perspectives that appear in the short term.
• Program different alternatives for variation in the fundamental tourist magnitudes.

• Adopt effective decisions regarding management policy in accordance with the previous objectives.
• Complementary objectives.
• Justify economic actions and measures by those who execute the policy or carry out planning.
• Systematic and periodic presentation of the results to business associations in order to guide their
actions and joint actions with the authorities, mainly those of promotion.

The data collected must meet certain essential conditions, such as:

• Coherence and uniformity in the concepts and criteria maintained at a spatial and temporal level.
• Reliability in the bases for collecting information and validity of the sources used.
• Lack of bias and accuracy in the values, that is, absence of all types of possible error.
• Application and operability for its management, treatment and inference, which makes its practical
application possible.
• Consistency and representativeness when compared and analyzed, among itself or in relation to
other statistics.

In those cases in which the information base is substantially constituted by numerical data of little
significance, the planning or simple programming of projects will have the enormous risk of inefficiency and
lack of economic and social profitability.

Statistics will serve to support decision making. The need to prepare statistics is not only reflected in the
desire to achieve the objectives, as other concerns and obligations soon arise that make it necessary to
have statistics.

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Difficulties we encounter in the preparation of statistics .

Observing the behavior of demand, there are features that make its assessment and analysis difficult:

• The mobility of travelers that prevents counting by destination points, producing duplications and/or
lack of consideration for movements.
• Great overcrowding or concretion in some tourist centers, making it difficult to have a complete and
detailed knowledge of the characters.
• The seasonality of demand, which causes concentrations in a few days and difficulty in counting
them.
• The degree of interrelation with other social or professional activities, which confuses and hides the
true motivations for travel.
• The lack of uniformity and understanding of the definitions and concepts of statistical units and those
who prepare them.

On the supply side there are also complications that cast doubt on effective quantification.

• The lack of the material nature of the services offered to tourists, without storage.
• The lack of proper and exclusive identification of the majority of sectors and branches linked to
tourism activity.
• Tourism activity does not have the independent rank of a productive branch, considering it as a
productive aggregate with strong indirect contents, problems in the classification of economic activity.
• Economic interrelationships are continuous and are affected in various magnitudes, depending on
their degree of dependence on other sectors of the economy.

From all of the above, the conceptualization of the contents and their interpretation are basic for the planning
of the different

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actions on tourism. It is a tool to guide the decision-making of officials and


businessmen, who seek to attract tourists to their countries or regions. The
amounts allocated to the promotion of a destination, country or region can be
important in terms of achieving the desired result: attracting tourists. Statistics are
thus a valuable tool in the decision-making process.

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WORLDWIDE TOURISM STATISTICS

WORLD TOURISM ORGANIZATION (2012 Update)

The publications of the world tourism barometer reflect:

The UNWTO expects tourism growth in 2012 as a whole to be between 3 and 4 percent. And the forecast
for world tourism for 2013 is that it will slow down slightly, growing between 2 and 4 percent.

1 .- Worldwide there have been 705 million tourist arrivals between January and August 2012, 28 million
more than in the same period in 2011, with greater growth in tourism in emerging countries (+5%) than in
developed ones .

2 .- In Europe, tourism continues to perform strongly despite the economic difficulties of the region, with a
growth of 3 percent compared to 2011.

Of note is the 9 percent increase in tourism in Central and Eastern Europe, while in Southern Europe and
the Mediterranean it has slowed down (+1%) following the recovery of tourism in North Africa and the Middle
East.

3 .- In America, tourism has grown 4 percent compared to 2011 data. The greatest growth has occurred in
Central (+6%) and South America (+7%), compared to 3 percent in North America and 5 percent in the
Caribbean.

4 .- Africa has been one of the continents where world tourism has grown the most in the first half of 2012.

This is the result of the recovery of tourism in Tunisia (+6%), which in North Africa has grown by 10
percent.

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For its part, the Middle East has stabilized after the clearly negative trend in tourism in the past. This year it
suffers a drop of only 1 percent, when in 2011 it had a decline of 7 percent.

5 .- Asia and the Pacific have been the regions where tourism has grown the most between January
and August , with an increase of 7 percent, with notable growth in Southeast Asia and South Asia (+8%),
and also the good tourism behavior in Japan.

6 .- In relation to tourism-emitting countries , among the countries in the world that spend the most on
tourism , there has been strong growth in spending by tourists from China (+30%), Russia (+15%), the
United States ( +9%), Canada (+6%) and Germany (+5%).

UNWTO Articles

International tourist arrivals in the world grew by more than 4% in 2011 to reach 980 million
In 2010, international tourism generated US$919 billion (€693 billion) in export earnings
The UNWTO forecasts a growth in international tourist arrivals of between 3% and 4% in 2012

415 million tourists expected worldwide for the high season of May-August

PR No.: PR 12044 Madrid 09 Jul 12

International tourist arrivals around the world grew by 5% in the first four months of 2012, despite the
economic uncertainty that persists in some of the main source markets. According to the latest UNWTO
World Tourism Barometer , the outlook remains positive for the May-August period,

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peak summer season in the northern hemisphere, with around 415 million tourists expected to travel abroad.

Japan, Egypt and Tunisia show clear signs of recovery

Between January and April 2012, international tourist arrivals (overnight visitors) worldwide amounted to 285
million, 15 million more than in the same period in 2011 (+5%).

Asia and the Pacific and Africa (both +8%) show the best results. These two regions recorded a clear
rebound in some of the destinations that had suffered a decline in 2011. In Asia and the Pacific, inbound and
outbound tourism from Japan is clearly recovering, with arrivals to the country having increased by 40% in
the first five months of 2012. In the African region, North Africa returned to the path of growth (+11%) thanks
to the results of Tunisia (+48% between January and May). The Middle East is also showing signs of
recovery, with a 1% increase in arrivals between January and April 2012, and especially promising results in
Egypt (+29% between January and May).

“It is very encouraging to see demand returning to countries like Japan, Egypt and Tunisia. They are tourist
destinations with a long tradition, ready to once again welcome the millions of tourists who choose to visit
them every year," said the Secretary General of the UNWTO, Taleb Rifai.

The Americas (+6%) recorded growth slightly above the global average, with strong results in almost all
destinations. For its part, Europe (+4%) consolidated its record growth in 2011, despite the persistence of
economic instability in the eurozone.

The UNWTO Confidence Index confirms these positive results. The evaluation of the behavior of tourism in
the first four months of 2012 by the more than 300 specialists who participated in the latest survey of the
UNWTO Group of Tourism Experts, was

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slightly above expectations expressed at the beginning of the year.

Around 415 million tourists will travel abroad, according to forecasts, between May and August

Now that we have entered the summer season in the northern hemisphere, the short-term outlook for
international tourism remains positive. The UNWTO Confidence Index for the May-August period has
improved compared to previous periods, especially among experts from advanced economies.

The UNWTO predicts that around 415 million international tourists will travel between May and August, the
peak season in most of the world's large source markets and tourist destinations. In recent years, these four
months have represented 41% of the annual total.

The outlook is confirmed by data on air transport reservations obtained thanks to the Forward Keys business
intelligence tool – included for the first time in the UNWTO World Tourism Barometer – which shows that air
transport reservations in the world for the period May-August are 5% higher than those of the same period
last year. Reservations for flights within the same region (+7%) are higher than those for flights between
different regions (+4%). Overall, growth is somewhat more moderate than in the first four months of 2012
(+7% worldwide). Air travel is an important tourism indicator, accounting for around half of total international
travel, according to destination data collected by the UNWTO.

The UNWTO predicts that international tourism will grow between 3% and 4% for the whole of 2012.
Although the pace of growth is slowing slightly, the number of international overnight visitors continues to
move steadily towards the milestone of one billion arrivals planned for this year.

Tourism, recognized as an essential engine of economic growth and development

The continued strength of tourism takes on particular importance in the context of current economic
uncertainty, and reinforces the need to increase political commitment and support for the sector. "Tourism's
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ability to drive growth and create jobs must be accompanied by public policies that strongly support it," said
Mr Rifai. .

For the first time, tourism has been identified by the G20 as one of the sectors that can spur global economic
recovery. Meeting last month in Mexico, the G20 highlighted the role of tourism in the economy and pledged
to work on facilitating travel as a way to encourage demand and spending and thus stimulate job creation.
Sustainable tourism has also been included in the outcome document of the United Nations Conference on
Sustainable Development, Rio+20, as a sector that, if properly planned and managed, "can make a
significant contribution to the three pillars of the sustainable development: economic, social and
environmental.

“UNWTO is confident that the growing political commitment in support of the sector will deliver positive
overall results for tourism and contribute to global growth, employment and the transformation of the
economy into a sustainable economy,” added Mr Rifai.

International tourism receipts exceed $1 trillion in 2011

PR No.: PR 12027 Madrid 07 May 12

In 2011, international tourism receipts surpassed US$1 trillion for the first time, up from US$928 billion in
2010. In real terms, income increased by 3.8%, following a 4.6% increase in tourist arrivals

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international. Another $196 billion in revenue from international passenger transportation brought the total
value of exports generated by international tourism in 2011 to $1.2 trillion.

According to the latest UNWTO World Tourism Barometer, international tourism receipts continued to
recover from the losses suffered by the crisis in 2009 and reached new records in most destinations,
reaching, according to calculations, 1.03 billion US dollars (740 billion euros) in the world, after the 928
billion dollars (700 billion euros) reached in 2010. In real terms (adjusting the figures for exchange rate
fluctuations and inflation), international tourism receipts grew by 3.8%, while international tourist arrivals
increased by 4.6% in 2011 to reach 982 million. The data confirms the close correlation between both
indicators, although income growth tends to lag slightly behind arrival growth in times of economic
restrictions.

“The results are encouraging,” said UNWTO Secretary-General Taleb Rifai. «In the last two years there has
been strong demand for international tourism in many markets, even though the economic recovery has
been uneven. This is an especially positive development for countries that suffer from budgetary restrictions
and a drop in domestic consumption and in which international tourism, a key activity in terms of imports and
labor, occupies an increasingly strategic place in the "time to balance the deficit and stimulate employment."

«We trust that governments around the world will become aware of this reality and will adopt measures to
support tourism, such as fairer tax policies or initiatives that facilitate the issuance of visas and the mobility
of travelers, since this type of measures have proven to stimulate economic growth and job creation," he
added.

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By region, the Americas (+5.7%) recorded the largest revenue increase in 2011, followed by Europe
(+5.2%), Asia and the Pacific (+4.3%) and Africa (+2. 2%). Only the Middle East recorded negative
growth ( 14%).

Europe holds the largest share of international tourism revenue in absolute numbers (45%), with 463 billion
dollars (333 billion euros) in 2011, with the Asia and Pacific region in second place (share of 28% or 289,000
million dollars/208 billion euros) and the third is the Americas (share of 19% or 199 billion dollars/143 billion
euros). The Middle East (4% share) earned $46 billion (€33 billion) and Africa (3% share) earned $33 billion
(€23 billion) (see table below).

In addition to income from international tourism (the “travel” item in the balance of payments), tourism also
generates export income through international passenger transport. This last concept amounted according
to calculations to 196 billion dollars in 2011, with which the total income generated by international tourism
would reach 1.2 trillion dollars or 3.4 billion per day on average.

As a result, international tourism (travel and passenger transport) currently represents 30% of global exports
of services and 6% of global exports of goods and services. As an export category, tourism is the fourth
largest global export category, after fuel, chemicals and food products, although it is at the top in many
developing countries.

Strong growth in international tourism spending in BRIC countries

Many source markets generated strong demand in 2011. However, it was the BRIC countries (Brazil,
Russia, India and China) that continued to stand out. China's spending on international tourism increased by
18 billion US dollars to reach

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73,000 million, that of the Russian Federation grew by 6,000 million dollars to 32,000 million, that of Brazil by
5,000 million to 21,000 million and that of India by 3,000 million to 14,000 million. In total, the increase
registered in these four countries represents an additional 32 billion dollars, a figure that is equivalent to the
eighth largest issuing market by spending. In terms of source markets in advanced economies, Germany,
Australia, Norway, Belgium and Canada recorded the highest absolute growth ( see table 1 ).

Increases in income in both emerging destinations and those of advanced economies

Emerging destinations and those in advanced economies benefited equally from the growth in 2011 in
arrivals and receipts. Among the destinations in which international tourism receipts increased by 5,000
million dollars or more in absolute terms are the United States (with an increase of 13,000 million dollars to
reach 116,000 million), Spain (increase of 7,000 million to 60,000 million), France (increase of 7,000 million
to 54,000 million), Thailand (increase of 6,000 million to 26,000 million) and Hong Kong (China) (increase of
5,000 million to 27,000 million). In addition, significant increases were recorded in destinations with lower
starting values such as Singapore, the Russian Federation, Sweden, India, the Republic of Korea and
Turkey

UNWTO welcomes regional tourism cooperation in Mexico and Central America

February 2012

The five countries that share the legacy of Mayan culture have committed to working together to promote
the tourist attractions surrounding this pre-Columbian civilization, which flourished between approximately
250 and 900 AD.

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The year 2012 marks the end of a cycle in the Mayan calendar and Mexico, Belize, El Salvador, Guatemala
and Honduras are working to capitalize on the growing interest in this ancient civilization, coordinating their
promotional efforts under a regional tourism brand, Mundo Maya.

Mundo Maya promotes and offers information about Mayan places of interest in southeastern Mexico and
Central America, and makes it easier for tourists to travel from one country to another, stimulating, as a
result, the integration of regional tourism.

This new tourism cooperation project was praised by the UNWTO, which has long encouraged a regional
approach to tourism development. Now that tourists are increasingly opting for trips to multiple destinations,
cooperation between neighboring countries has proven to be an extraordinarily effective means of increasing
tourist arrivals, as has happened in regions such as Europe, the Caribbean or Central America, where
different bodies Regional tourism organizations work to promote common itineraries.

Mundo Maya received congratulations from the Secretary General of the UNWTO, Taleb Rifai, who asked
other countries to work to facilitate the crossing of borders and undertake joint promotion initiatives as a way
to enhance the development of tourism.

http://mkt.unwto.org/es/barometer

http://www.unwto.org/facts/eng/ITA&TR.htm

The UNWTO thus publishes bulletins with tourism trends for the different regions of the world based on a
compilation of data and surveys that experts in the different member countries contribute to their
preparation, explaining, among others, particular situations that significantly affect reality. socio-economic
conditions of their countries and how these affect tourist arrivals to their countries and trends

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e

tourism statistics,

The Savior

Tourist income is recorded like this:

Income in Millions of USD


Dollars Income
Year 2009 415.9 800
Year 2010 416.9
Year 2011 487.9 600
Year 2012 602.9 400
200
Period from January to October 0
1 2 3 4
Source CORSATUR
The visitors:

year hikers tourists visitors


2009 285,746 794,746 1,080,492
2010 344,945 852,559 1,197,504
2011 342,096 856,136 1,198,232
2012 361,695 907,889 1,269,889

Source CORSATUR

Agreements on free transit of travelers are essential to support immigration control, for which CORSATUR
implemented automatic vehicular passage control at land customs and registers the vehicles that enter
through each border crossing, operated by sensors on the pavement. This is complemented by a
questionnaire on entries and vehicle capacity control, which provides more reliable data on the number of
entries.

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The method allows us to distinguish country of residence and nationality in order to correctly identify
incoming tourism, which is what interests us for the quantification of arrivals and the control or calculation of
tourist spending. (Grafo Test Methodology)

The forms used have been approved by CORSATUR and respond to the methodology proposed in the CA-4
regional project supported by the Secretariat of Tourism Integration of Central America. This methodology
allows travelers to be separated from tourists as such.

On the other hand, at the airport, there is a baggage declaration (or TIE customs ticket) that allows the
capture of data that complements the registration of the sample. For the year 2010 and 2011 the source is
Migration, but it is from the TIE ballot.

Movement of tourist flows

The Tourist Flow (or flow) is the movement or displacement of people from an origin or sending nucleus to
a destination or receiving nucleus.

A Tourist Nucleus is a geographical place that generates a sending or receiving tourist activity. The
Emitting Nucleus is the one that generates tourist current or flow towards another place that has resources
and offers to attract said current, this place is the Receiving Nucleus.

The real flow of tourism services begins in the market of productive factors, moves to the tourism
productive sector, where the tourism product is processed by tourism companies (product = consumer
goods + investment goods).

EXPLANATORY NOTES

Arrivals It should not be assumed that the number of arrivals is equal to the number of people traveling.
When a person visits the same country several times in a year, they are recorded as arrivals that same
country.

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number. Furthermore, if a person visits several countries during the same trip, their arrival in each of said
countries is recorded individually. Arrivals associated with inbound tourism refer to the arrivals of
international visitors within the economic territory of the reference country and include both tourists and non-
resident day visitors.

Arrival data can be obtained from various sources. In some cases, they come from border statistics through
the use of administrative records (police, immigration, movement controls and others carried out at national
borders) and eventually completed through statistical border surveys. In our country, the land immigration
control system called CA-4 is used as a case. In other cases, they come from different types of tourist
accommodation establishments (hotels and similar establishments and/or all types of tourist accommodation
establishments). Currently, a hotel occupancy sample collection system is in use, similar to that used in
Mexico.

Visitor The United Nations International Travel and Tourism Organization defined a visitor as "any person
who moves to a country other than that in which he or she has his or her habitual residence, for any reason
other than to exercise a remunerated profession in that country." same country". For statistical purposes, it is
defined as "any person who travels to a place other than his or her usual environment, for a duration of less
than twelve months, and whose main purpose of the trip is not to carry out an activity that is remunerated in
the place." visited", the usual environment being understood as the combination of the criteria minimum
distance traveled, minimum duration of absence from the place of residence and minimum changes between
localities or administrative territories. This definition is the one adopted for the CST.

Day visitor (excursionist) Is a visitor who does not spend the night in a collective or private
accommodation in the place or country visited.

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International visitor Any person who travels, for a period not exceeding twelve months, to a country other
than that in which he or she has his or her habitual residence, but outside his or her usual environment, and
whose main reason for the visit is not to exercise a activity that is remunerated in the country visited.

Internal visitor Any person who resides in a country and who travels, for a duration not exceeding 12
months, to a place within the country but different from its usual environment, and whose main reason for
the visit is not to carry out an activity that is remunerated in the place visited.

EVALUATION OF TOURIST FLOWS

Tourism predictions should not be limited to visitor flows alone. Motivations and socioeconomic impact from
an isolated point of view, since all these variables react together in all stages of tourist activity.
Consequently, it is necessary to carry out measurements that allow predictions to be compared with real
events. The statistics obtained from the predictions would make it possible to determine the magnitude of
the relationships between budgeted tourist flows and actual flows, weighted by their respective economic
value in terms of foreign currency. In this way, a more refined measure of the economic performance of
tourist flows would be obtained.

Any attempt to evaluate the economic impact of tourism with figures relating to visitor entries and exits and
the economic value of goods and services at the site or sites visited would be an erroneous procedure.
These figures must be compared with a pattern of expected results as a consequence of adequate planning
of tourism operations.

As a result of this comparison, it is logical that differences arise between the estimated figures and the actual
figures, whether they are higher or higher.

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lower than predictions. The need for an evaluation of this nature requires the generation of
an indicator that is capable of including both financial and non-financial variables,
consolidating them into a single indicator; This is how they are:

The economic performance of the tourist flow (REFT): based on estimated figures, relative to
the volume of visitors and expected foreign exchange per visitor, compared with the actual
figures.

The need to establish this relationship generates the Real Economic Performance of Tourist
Flow Index Method (RERFT). This indicator considers the following basic variables:

• Actual flow of visitors in number of people (FRV)


• Estimated flow of visitors in number of people (FEV)
• Average real spending per visitor (GRV)
• Average expected expenditure per visitor (GEV)

The characteristics of these variables allow us to calculate:

This indicator compares estimated visitor flows with actual flows. It is calculated by dividing
the actual visitor flow (FRT) by the estimated visitor flow (FEV) and then multiplying by 100.
So:

RFT = (FRV/FEV) x 100

This indicator would determine the performance of the tourist flow considering only the
number of visitors.

Tourist Flow Performance (RFT) This indicator compares the expected expenditures of
visitors with the actual expenditures of visitors. It is calculated by dividing the average actual
spend per visitor by the average expected spend per visitor and then multiplying by 100. So:

REFT = (GRV / GEV) x100.

specific, key in tourist activity; However, they present limitations for the formulation of
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generalized conclusions. Thus, the Executive RFT would measure the performance of the tourist flow.
However, it does not consider the economic effect of the flow of visitors on the receiving community. Despite
this limitation, the RFT is a very useful indicator, both for historical comparisons and in competitive analysis.
Likewise, the REFT would measure the average economic performance per person without considering the
total flow of visitors, in addition to the problems that the averages present with the extreme values of the
universe from which the corresponding statistical calculations come. However, like the RFT, it is
recommended as a tool that can be used for both historical comparisons and competitive analysis.

• The Economic Performance of the Tourist Flow (REFT) Index of the Real
Economic Performance of the Tourist Flow (RERFT.) By combining the two previous
formulas, a more refined measure can be obtained which would generate a weighted
index. In this way, all the variables that the two indicators described above do not
include in their calculations are considered. Thus, the Index of Real Economic
Performance of Tourist Flow emerges.

So:

• RERFT = [(FRV x GRV) / (FEV x GEV)] x 100


• As: RFT = (FRV/FEV) x 100; and REFT = (GRV/GEV) x 100
• The formula can be expressed: RERFT = (RFT x REFT) x 100

For purposes of illustration of the model, the following example with hypothetical data is
shown as an illustration.

Report RFT = (1,400,000 / 3,000,000) x 100 = 46.66%


Executive
Calculation of Tourist Flow Performance:
The Minister of Tourism estimated in 2012 that by 2020 they would visit the Country
3,000,000 tourists, who would spend

REFT = (669.60 /1,400) x 100 = 47.82%

Calculation of the Economic Performance of the Tourist Flow

Calculation of the Real Economic Performance of the Tourist Flow:

RERFT = [(1,400,000 x 669,000) / (3,000,000 x 1,400)] x 100 = 22.3%

Using the abbreviated formula:

RERFT = (0.4666 x 0.4782) x 100


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Visitor statistics for the year 2012, the Country was visited by approximately 1,400,000
people with an average real expenditure per person of USD$669.60. (An average
expenditure per person of USD$108.00 daily x 6.2 days) With the data provided for the
calculation of the performance of the tourist flow, the economic performance of the tourist
flow and the real economic performance of the tourist flow, the formula would be applied as
follows manner:

Interpretation As can be seen, both ways of performing the calculations produce the same
result. Likewise, it is shown that both the RFT (22.31%) and the REFT (46.66%) are
insufficient to formulate a conclusion about the authentic performance of the tourist flow. The
results obtained seem to be quite acceptable; But when the variables are combined to
calculate the RERFT, it is determined that the combined performance becomes 22.3% due to
the joint reaction of the tourist flow with tourist consumption.

Average expenses

The expense will always involve the disbursement of a sum of money that can be in cash or,
in the case that it is an expense that will be faced through the bank account, it will lead to a
bank movement, which is called. For 2011 the average expense reported by MITUR is
USD$103.00.

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This average is extracted from the daily expenditure of the hiker USD$38.20, foreign tourists
USD$82.90 and Salvadorans residing abroad USD$108.00-

An expense can take the form of payment for a service such as electricity, gas, telephone,
cell phone subscription, cable service subscription, among others, and also other very
common types of expenses such as the purchase of some personal effect, such as a pair of
jeans, a polo shirt, a pair of shoes, food and any other need or taste that involves the
disbursement of money in any of the forms in force today.

Average expenditure of domestic tourism

In the period from January to October 2012, 2.9 Million Salvadorans visited the different
parks managed by ISTU, 20% more than 2011, generating USD$1,615,059.34 dollars.

According to the authorities, the growth is explained by greater purchasing power of


Salvadorans, which translates into a better standard of living, even in the midst of the limited
circumstances that Salvadorans experience. The tourist parks report record visits,
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Amapulapa alone received 542,570 visitors as of October 2012, Los Chorros 321,590 and
Inchanmichen 219,4833 in the same period.

Comments. These nationals mobilized throughout the national territory to enjoy the best
quality of service and the tourist benefits of beaches, mountains and colonial cities or Living
Towns.

According to data provided by MITUR, the average accommodation is 4.2, 6.2 and 12 days.

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Balance of payments and tourism

The balance of payments lists and quantifies on the asset side all the items through which the residents
of a country received external purchasing power through the goods and services provided and through
the sale of securities (import of capital). ). It also lists and quantifies, on the liabilities side, all the uses
that the residents of said country gave to their external purchasing power, for the import of goods and
payment for services received and for the export of capital (import of securities).

Concepts
Balance of Payments. It is, precisely, the account where the transactions that a country has with the
rest of the world in a specific period of time are recorded.
Broadly speaking, these transactions can be of two types: real (mainly those related to the trade of goods
and services) or financial (those related to capital flows).

Balance of Payments Structure


It is structured into four subdivisions:
• Financial account.
• Current account.
• Capital account.
• Account of errors and omissions

Current account. The current account balance records payments from trade in goods and services and
income in the form of profits, interest and dividends obtained from capital invested in another country.
The purchase and sale of goods will be recorded in the trade balance, services in the services balance,
profits in the income balance and money transfers in the transfer balance.
The current account balance will be divided into two sections. The first is known as the visible balance
and is entirely made up of the trade balance. The second section is called the invisible balance and is
made up of the balance of services and the balance of transfers.

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Balance of trade. The trade balance, also called goods or merchandise balance, uses the data collected by
the General Directorate of Customs (and the Ministry of Finance) as a source of basic information. It records
payments and receipts from imports and exports of tangible goods, such as automobiles, clothing or food.
One thing to keep in mind is that imports and exports in the Balance of Payments must appear with FOB
valuation for Exports and CIF for Imports, which is how customs prepares them. FOB (Free On Board)
prices differ from CIF (Cost, Insurance and Freight) prices in that the latter include freight and insurance.
When preparing the Balance of Payments, freight and insurance must be accounted for as services and not
as merchandise.

Balance of services. This will collect all income and payments derived from the sale and purchase of
services provided between the residents of one country and the residents of another, as long as they are not
factors of production (labor and capital) since the latter form part of the income.

The services are:


• Tourism and travel , which includes the services and goods acquired in an economy by travelers,
therefore not only includes the provision of services, but also includes the goods consumed as the
largest amount of the section, it is considered that these products, despite Not being sent to another
country, they are consumed by foreign residents who come to visit a country. As it is sometimes
impossible to determine what is a sale of a product and what is a provision of services, all of this is
always included within the heading of services.
• Transportation , which includes both collections and payments made for freight and any other
transportation expense (for example insurance). It is an important item, given that many countries are
dedicated to transporting goods between third parties.

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• Communications , collects postal services, email, etc.


• Construction.
• Insurance is estimated by the difference between premium income and compensation payments.
• Financial services , includes financial intermediation services, which among others include
commissions for obtaining and placing funds, transfers, payment, currency exchange, etc.
• Computer and information services , such as advice and configuration of computer equipment,
repair thereof, software development services, news agencies, reports, press reports, etc.
• Services provided to companies , such as commercial services and operational leasing
• Personal, cultural and recreational services
• Government services , which includes collections and payments related to embassies, consulates,
representations of international organizations, military units, etc.

Balance of income. Or factorial balance of services, collects the income and payments registered in a
country, in the form of interests, dividends or benefits generated by the factors of production (labor and
capital), Or what is the same, of investments made by the residents of a country in the rest of the world or by
non-residents in the country itself.

The income is the income received by the owners of the factors of production who are residents and
invested abroad, while the payments are the income that we deliver to the non-resident owners of the factors
of production and who are invested in our country. . Labor income includes the remuneration of frontier
workers, whether seasonal or temporary.

Transfer balance. This will record the movements of money between residents of the country and residents
abroad, and can circulate in both directions. These transfers are normally of the type

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donation or prize and can be both public (e.g. donations between governments) or private (e.g. money that
emigrants send to their countries of origin)

The main problem with the balance of transfers is that it is sometimes difficult to determine which transfers
are part of the current account and which are part of the capital account. Remittances from emigrants, taxes,
donations, artistic prizes, scientific prizes, gambling prizes will be considered current account transfers.

Capital account. The second major division of the balance of payments is the balance of capital. This
includes capital transfers and the acquisition of non-produced intangible assets. Capital transfers
encompass all those transfers that are intended to finance an investment good, including those received
from international organizations for the purpose of building infrastructure.

Financial account. Map of countries by foreign currency and gold reserves minus external debt based on
2012 CIA Factbook data Main article: Financial balance

Records the variation of financial assets and liabilities. Therefore, it includes financial flows between the
residents of a country and the rest of the world.
The different headings of the financial account collect the net variation of the corresponding assets and
liabilities.
• Direct investments.
• Portfolio investments.
• Other investments.
• Derivative financial instruments.
• Financial account of the Central Bank.
Account of errors and omissions. This covers what is known as undetermined capital. It is said to be an
adjustment for the statistical discrepancy of all other balance of payments accounts. In

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In reality, the sum of the balances of the current account and the capital account must equal the variations in
international monetary reserves.

Investment. In economics, investment is a term with several meanings related to savings, the allocation of
capital and the postponement of consumption. The term appears in business management, finance and
macroeconomics. Investments, whether short or long term, represent placements that the company makes
to obtain a return on them or receive dividends that help increase the company's capital. Short-term
investments, if you will, are placements that are practically effective at any time, unlike long-term
investments that represent a little more risk in the market.

Definition of Investments. They represent placements of money on which a company expects to obtain
some return in the future, either by realizing an interest, dividend or by selling at a higher value than its
acquisition cost.

Investment classification
• Depending on the object of the investment.
• Industrial equipment.
• Raw Materials.
• Transportation equipment.
• Complete companies or shareholding.
• Due to its function within a company.
• Renewal are those intended to replace the equipment used, which due to physical, technical or
obsolescence factors, has become obsolete.
• Expansion, expansion investment is intended to increase the company's potential market, through the
creation of new products or the capture of new geographic markets.

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• Improvement or modernization, they are intended to improve the situation of a company in the
market, through the reduction of manufacturing costs or the increase in product quality.
• Strategic, their objective is to reduce the risks derived from technological advances and the behavior
of competitors.
• According to the subject who performs it.
• Private.
• Public.

Capital flight
What is capital flight? There is no definition of capital flight that is accepted by the majority of scholars of
the subject. The analysis of the different definitions allows them to be grouped into two blocks.

• First Concept of capital flight in a broad sense. From this position, any outflow of private capital from
developing countries would be considered capital flight, whether it involves short- or long-term
investments, securities or assets.
• Second Concept of capital flight in a strict sense. The use of the term capital flight is generally
associated with short-term outflows for speculative purposes or with outflows resulting from economic
or political uncertainties in the country of origin. In short, this is money that is being evaded from the
country and not foreign investment guided by long-term economic considerations.

The problem of capital flight does not lie in the outflow of private capital itself, but in that part of the outflows
that is lost - temporarily or permanently - for the country. Although it is true that total wealth (internal plus
external) can remain unchanged due to capital flight, when the Government is not aware of it or the returns
on resources invested in foreign assets, accumulated by national residents, remain outside the country. or
are brought into the country through unofficial channels, the external income and wealth of residents

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Alejandro Gomez. Consultant,
e-mail: alexgo@navegante.com.sv .
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e

nationals cannot contribute to servicing the country's debt or financing its development programs.
In practical terms, capital flight could be defined as the difference between the total outflows of private
capital and the part of it that remains identified and declared for the purposes of repatriation of interest.

How does the capital flight mechanism work?

There are many procedures.

• First. If there are no exchange or capital controls in place, domestic residents simply transfer funds
abroad at the prevailing exchange rate.
• Second. If there are exchange controls, the difficulties increase for potential evaders, but experience
shows that such controls can be circumvented.

Among the most common systems the following can be mentioned:


a. Underinvoicing of exports.
b. The overinvoicing of imports.
c. Smuggling of coins or products that gives rise to income in foreign currency.

"Capital flight": Under exchange control, the flight of foreign currency - which the Central Bank can record
in the Balance of Payments - is that which occurs at the official exchange rate. There is no official record of
those currencies that, obtained through the parallel market, also go abroad. However, even with official
figures, capital flight abroad - specifically from the private sector - has reached truly alarming levels. We can
only say that the Private Sector "transferred" strong investments from the country to other countries in the
region, invested in shopping centers, hotel complexes, among others.

43
Alejandro Gomez. Consultant,
e-mail: alexgo@navegante.com.sv .
Report
Executiv
e

Results of capital flight

“The private sector or businessmen not only imposed their rules and earn a lot of money in the
country, but in the last 11 years they have invested 3,842 million dollars abroad, which gives an
average of 350 million per year. In 2011 alone they took out 461 million, a figure higher than the
382 million that entered the country through foreign investment.

Large business groups have made a lot of money in recent decades, since their governments
sold them many companies, such as banks, pension funds and others, removed taxes from their
coffee and sugar exports and their assets, cut them 35% to 25% tax on their profits, they cut
customs taxes (tariffs) and let them set prices of 230
products and the interest rate of their banks.
Years Amounts
(thousand If these business groups invested all their money in the
dollars)
2001 203 country, production would grow a lot and a part of it
2002 293 would not find anyone to buy it, since the income from the
2003 469 Most of the population are low and there is a lot of unemployment
2004 455 and poverty. Therefore, it is better to invest part of your money
2005 426 abroad, especially in Central America, where they have hotels,
2006 350 warehouses, shopping centers, import companies and many other
2007 382 businesses. And to facilitate the flight of their capital, they dollarized
2008 301 the economy, since colones are not worth anything abroad.
2009 194
2010 290
El Salvador: national investment abroad
2011 461
Total 3,842 Source: Central Reserve Bank: Quarterly Magazine of
several years

The narrowness of the internal market, caused by the deep concentration of wealth in a minority
of the population, is the main obstacle to the national economy. And that is why the enormous

44
Alejandro Gomez. Consultant,
e-mail: alexgo@navegante.com.sv .
Report
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e
Wealth hoarded by a business minority flows abroad to grow.

Since a good part of private investment flees abroad and since the State does not have the necessary
resources to increase its investment, national production does not rebound. The narrow internal market is
the great knot of national and foreign investment, a knot that could only be untied if wealth and income are
redistributed in favor of the State and the population.” http://www. Verdaddigital.com/index.php?
option=com_content&view=ar ticle&id=772:la-fuga-de-capitales-de-los-grandes-
entrepreneurs&catid=27:opiniones&Itemid=41.

Importance of the exchange effect in tourism activity

Since I remember my student days, tourism has been paid in dollars. Rates for airplanes, hotels, tours, etc.
By 2001, the government imposed dollarization of the economy and withdrew the Salvadoran colon from
circulation, whose exchange rate at that time was 8.75 colones per USD$1.00.
The economy changed and affected the lives of Salvadorans, although for practical purposes, since tourism
has always operated in dollars, this only facilitated transactions.

However, as an illustration, we review the positive and negative effects of the exchange rate effect that does
affect the other countries in the region.

Effects of tourist activity

Positives
• The GDP growth of the recipient countries. In many countries, such as Spain or Mexico, tourism
income represents a very important part of GDP.

45
Alejandro Gomez. Consultant,
e-mail: alexgo@navegante.com.sv .
Report
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e

• The creation of direct jobs in the hospitality industry and travel agencies,
plus other indirect jobs in construction, commerce,
real estate, etc.
• The construction of transport and communications infrastructure, as well as
health equipment,
educational, sports, etc.
• The new economic possibilities for rural areas, which stop emigration.
• The international promotion of many local products.

Negatives
• Much of the benefits do not revert to the destination country, but to the
country of origin, because that is where almost all the tour operators and
large transport companies are located.
• The employment it generates is low-skilled and, many times, in precarious
conditions of wages and hours.
• The economic structure can become unbalanced. Tourism absorbs most
of the resources, while other productive sectors are not promoted.
• The impacts on the natural environment result in the loss of flora and
fauna, overexploitation of aquifers and an increase in built surface .

46
Alejandro Gomez. Consultant,
e-mail: alexgo@navegante.com.sv .

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