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Weak Peso and Improved Safety to Boost Tourism Sector in Colombia: Ken Research

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The spectacular growth of the Tourism sector in Colombia has even outpaced the global tourism growth rates as well as the average tourism growth rate of all the South American countries – PowerPoint PPT presentation

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Title: Weak Peso and Improved Safety to Boost Tourism Sector in Colombia: Ken Research


1
Weak Peso and Improved Safety to Boost Tourism
Sector in Colombia Ken Research
2
Ken Research announced its latest publication on,
Travel and Tourism in Colombia to 2020, offer
insights on the changing trends and key issues
within the Travel Tourism Sector in Colombia.
The publication includes an insightful analysis
of demand-side dynamics, tourist flows,
expenditure patterns, tourism related
intermediate industries along with emerging
growth opportunities and challenges inthe Travel
Tourism Sector in Colombia. The analysis of the
aforementioned trends has been done across key
categories within the sector domestic tourism,
inbound tourism, and outbound tourism. The report
also includes analysis of trips by purpose, mode
of transport and customer type-leisure and
business travellers.
3
  • Brief Overview of Travel Tourism Sector in
    Colombia
  • Colombias Travel Tourism sector is crucial to
    its economy. The sector has consistently
    increased its contribution to the GDP. Presently
    the sector contributes around 2.2 to the GDP.
    The spectacular growth of the Tourism sector in
    Colombia has even outpaced the global tourism
    growth rates as well as the average tourism
    growth rate of all the South American countries.
    With rich and diverse geography as well as unique
    biodiversity, Colombia has a great potential for
    eco-tourism as well. Some of the popular places
    to visit in Colombia includeBogota, Cartagena,
    Medellin, Amazon and the Andean regions the
    Caribbean Pacific Coasts the desert of La
    Guajira etc.
  • Looking at the present scenario, Colombias
    tourism sector is growing with strong growth
    rates. Two key events influencing the tourism
    sector in the country are Home currency
    depreciation improved safety on account of
    signing off ceasefire agreement between the govt.
    and the FARC rebels. Improved safety has
    positively affected the growth of the sector.
    While weakening of the peso has significantly
    changed the consumer preferences over domestic,
    inbound outbound trips. Due to weak peso
    Colombians are turning to domestic trips over
    outbound trips.

4
Also, as a result of weak peso, inbound tourism
has witnessed remarkable growth over last few
years 8.2 in 2013, 7.4 in 2014, and 16.3 in
2015. International arrivals, largely from US and
Venezuela, totalled 2.3 million in 2015. Outbound
tourism has been suffering as a result of falling
value of peso. Outbound trips declined by -1.3
in 2015 while expenditure declined by
-0.6. Government also plays an important role
in the tourism sector. As for example,
introduction of the new tax policy which exempts
foreign tourist from paying sales tax on tourism
related services construction plan of new
airports while renovating and expanding the
existing ones are totally government efforts for
developing the tourism sector in Colombia.
However, high congestion at airports urging the
immediate construction and expansion of the
airport capacity will be a serious challenge to
the government as well as for the overall tourism
sector. Key Factors Driving Growth in Colombias
Travel Tourism Sector The strong performance
of the Travel Tourism sector in Colombia over
the last several years is due to various factors
influencing the demand-side dynamics offering
vast growth opportunities to the market players
and encouraging them to strategize their business
actions accordingly. This ultimately leads to
expansion and development of the overall tourism
sector.
5
  • Since, Tourism sector is a crucial part of a
    countrys economy, hence, government
    participation through increased investment in
    tourism related development plans has also played
    a crucial role in the growth of the sector.
  • Key factors driving growth in Colombias Travel
    Tourism sector include
  • Depreciation of home currency
  • Weakening of Peso has significantly influenced
    consumer preferences over domestic, inbound
    outbound trips. Colombians have turned to
    domestic trips hence, declining international
    departures have led to negative outbound tourism
    growth. On the other hand, inbound tourism has
    witnessed impressive growth.
  • Improved Safety
  • Signing of the ceasefire agreement between
    Colombian Govt. the FARC rebels to end the 50
    years conflict is expected to have a significant
    impact on international arrivals.
  • New Tax Policy
  • Govt. aiming to enhance the tourism sector
    outlook has introduced a new tax policy which
    exempts foreign tourists from the 16 sales tax
    (VAT) on tourism-related services. This will
    further boost the rising inbound trips.

6
  • Airport Capacity Expansion Increasing flights to
    Colombia
  • To reduce congestion at airports, govt. has come
    up with various plans of construction of new
    airports. Also, the number of domestic as well as
    international flights to Colombia has been
    increasing over years. These factors greatly
    support the tourism sector growth.
  • Great Potential for Eco-tourism
  • With very rich and diverse geography, including
    the Amazon and the Andean regions the Caribbean
    Pacific Coasts the desert of La Guajira etc.
    along with the presence of unique biodiversity,
    Colombia has great potential for eco-tourism.
  • Future of Colombias Travel Tourism Sector
  • Starting from a relatively low base, tourism
    sector has shown remarkable performance and is
    expected to continue with the spectacular growth
    over several coming years outpacing the tourism
    market in the South American region. Weakening of
    the peso and improved safety will play a crucial
    role in driving tourism sector growth over the
    coming years.

7
Other factors will reinforce the growth momentum.
Weak peso will continue to support domestic and
inbound tourism growth while leading to decline
in outbound tourism growth. Over the forecast
period, domestic trip are projected to grow at an
average annual rate of 5.7, to reach 32.6
million domestic trips by 2020 inbound tourism
is forecasted to grow at a CAGR of 6.7 to reach
3.2 million international arrivals by 2020 and
declining outbound tourism is expected to reach
5.1 million by 2020. The construction of new
airports as well as expansion of the existing
ones will reduce congestion at airports and also
serve in accommodating the rising international
arrivals. The implementation of the sales tax
exemption policy for foreigners on tourist
related services will lead to further rise in
inbound trips. Thus, we can say that Colombia is
increasingly focusing on their tourism sector
growth so as to firmly establish the country as a
leading international tourist destination on the
global platform.
8
  • Companies Covered
  • Avianca
  • Lan Colombia
  • VivaColombia
  • Copa Airlines Colombia
  • Satena
  • GHL Hotels
  • Hotels Estelar
  • Hotels y Resorts Decameron
  • InterContinental Hotels Group
  • Hotels Royal
  • Hotels Laureles Estadio
  • Hilton Hotels and Resorts
  • Operadores Hoteleros Santorini
  • Solar Hotels and Hotels Dann

9
To know more on coverage, click on the link
below https//www.kenresearch.com/media-and-ente
rtainment/tourism/travel-tourism-colombia/39462-94
.html Related Reports https//www.kenresearch.co
m/media-and-entertainment/tourism/travel-tourism-i
n-cyprus-to-2020/37551-94.html https//www.kenres
earch.com/media-and-entertainment/tourism/travel-t
ourism-malaysia-2020/31999-94.html Contact Ken
Research Ankur Gupta, Head Marketing
Communications query_at_kenresearch.com 91-124-42302
04
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