REPORT FROM COLOMBIA— The dynamism of some internal factors helped sustain satisfactory performance of the national economy for Colombia.
In 2013, the Colombian economy grew by 4.3%, a slightly superior rate compared to 2012 (+4%) and despite the weak international situation, according to Banco de la República, Colombia.
The figures are positive for tourism and investment. According to, Proexport Colombia:
- Colombia is the 28th largest world economy.
- It is one of the economies that contributes the most into the global economy growth due to the respect of the private property and intellectual property, natural resources, the progress in national security, the peace process, and the North American Free Trade Agreement with 50 countries and the rapid growth in foreign direct investment.
- There are more than 45 million Colombian people, and the World Bank considers the country to have above average incomes.
- It is believed the number of middle class people will duplicate during the next decade and reach almost 50% of the total population of the country.
- The consumption of expenses were doubled during the last five years (2009 through 2013).
- Colombia is ranked sixth on the Investor Protection Index.
- Tourism is the third most important sector for the Colombian economy, after oil and coal and before more traditional products such as coffee beans, flowers and bananas.
- The gross domestic product in the hospitality sector reached 10 billion Colombian pesos ($5.2 million) in the third trimester of 2013, a growth of 4.5% compared to the same time period in 2012, according to the National Register of Tourism.
- There are some appealing incentives for hospitality investors: tax exemption for the next 30 years for investors in hotel construction or refurbishment who are investing between 1 January 2003 and 31 December 2017.
- Income tax exemption is available for the next 20 years for investors in ecotourism services between 2003 and 2023.
- Strategic location and advantageous aerial connectivity: 878 direct global flights per week and more than 20 airlines operating through the country.
- Growing hotel demand and offerings.
- Positive hotel market situation: Bogota is considered to have a large hotel offering that can exceed demand.
- The tourism activities in Colombia are globally recognized and they allow tourists to live unique experiences.
Country / facts and figures – 2013
Source: Boletin de Indicadores Economicos
Hospitality / facts and figures - 2013
Source: STR Global
Demand
According to Proexport Colombia, the arrival of global travelers in Colombia has constantly increased during the past few years. In 2013, the number rose by 8.5% compared to the previous year, making it the best performance in the last two years. That number could reach 2 million in 2014. According to the Ministry of Trade, Industry and Tourism of Colombia, most travelers came from the United States (19.9%) and Venezuela (13.9%). The main reasons to travel are holidays, breaks and leisure (65.8%), followed by business and professional reasons (15%).
Bogota hosted 51.5% of the global tourism market in 2013, still being the main city destination for foreign travelers, according to Instituto Distrital de Turismo. The growth has been positive for some years. The figure grew by 9.8% in 2013, with travelers mainly from the U.S. (29%), Venezuela (13%), Spain (9%) and Ecuador (5%). The main reasons for traveling were breaks and holidays (36%).
Bogota hosted 6.9 billion national tourists in 2013. Most tourists came from Cundinamarca (17%), Tolima (12%) and Meta (11%). The main reasons to travel were business and work (50%) as well as visiting family and friends (24%), according to Instituto Distrital de Turismo.
Hotel offering
The national offering in the hotel market continues to increase. Between 2005 and 2012, it grew by 17,000 hotel rooms, according to Proexport Colombia. According to the National Register of Tourism, there were 137,027 hotel rooms in August 2013, divided mainly into four cities: Bogota, Cartagena de Indias, Santa Marta and Medellin. That figure should increase by 6,964 new hotel rooms in 2014.
Hotel offerings augmented during the last year in Bogota due to the growth and the positioning of the city as a business center for the last decade.
In 2013, 1,095 new hotel rooms were added, which represents 0.6% less than in 2012 when 1,102 new hotel rooms were created. In 2014, 1,593 new hotel rooms are expected, while 850 rooms are expected in 2015. The hotel room offering in Bogota increased by 4.98% between 2012 and 2013.
The global hotel chains operating in the city are InterContinental Hotels Group, Marriott International, Starwood Hotels & Resorts Worldwide, Hilton Worldwide Holdings, Carlson Rezidor Hotel Group, Accor and Sonesta International Hotels Corporation.
Occupancy and rates
The national hotel occupancy rate has been increasing constantly since 2009. In 2013, this rate rose by 1.8%, according to STR Global, sister company of Hotel News Now. When reported in U.S. dollars, average daily rate decreased by 2.9%, and revenue per available room fell by 1.2%.
In Bogota, the hotel occupancy rate increased 0.9% between 2012 and 2013. When reported in U.S. dollars, ADR declined by 6%, and RevPAR fell by 5.1%.
Investment
The foreign direct investment in trade, restaurants and hotels has been boosted by an average of 200% for the last four years, according to Proexport Colombia. The general FDI reached $16.8 billion in 2013 (+8%), where 9% of it went to the trade, restaurants and the hotel sector, according to Boletin de Indicadores Economicos.
The hospitality offering in Colombia has considerably augmented since 2003, mainly thanks to the various fiscal incentives, such as the income tax exemption, or thanks to the tariff suspension for the hotel and tourism-related operations. These benefits fostered the investments in new hotels of many global chains such as Best Western International, Holiday Inn, Marriott or Hilton.
The sectors with the most development potential are wellness tourism, eco-luxury hotels, eco-gambling, eco-lodge and nature-oriented infrastructures, sun and beach (luxury hotels, luxury resorts, golf resorts), urban accommodations and entertainment (construction of theme park, leisure and events center).
Maria José Gutiérrez holds the position of Director for Horwath HTL Latin America and is Managing Director of Horwath HTL Mexico and Horwath HTL Colombia. She specializes in ski resorts, residential tourism, thermal tourism, hotels and resorts conceptualization, golf courses, marinas, and tourism standards and quality.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Columnists published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.