tourism in colombia, a hospitality investment opportunity

TOURISM IN COLOMBIA,
A HOSPITALITY INVESTMENT OPPORTUNITY
Foreign Direct Investment VP
Bogota, August 2011
About Us
Proexport promotes International Tourism, Foreign
Direct Investment and Exports
TOURISM
INVESTMENT
EXPORTS
Proexport Around the World
Canada
Russia
UK
UK
United States
Spain
Caribbean
Venezuela
France
India
Arab Emirates
Hong Kong
Singapore
Ecuador
South Korea
Shanghai
Brazil
South Central America
Japan
China
Turkey
Mexico
North
Triangle
Germany
Peru
Chile
NEW OFFICES
About Us
Proexport: assists existing and prospective investors
 Tailor made information requests (industry and legal)
 Contacts with key entities in the public and private sectors
 Set up of site visits
 Aftercare services for investors already established in Colombia
 Assessment and improvement of business climate
 Confidential and free of charge. All information provided is handled
with the utmost discretion.
www.proexport.com.co
10 Reasons to invest in
tourism and hotel
infrastructure in
Colombia
1. Outstanding
performance of the
Colombian economy
Three of the most important qualification agencies have
granted the “Investment Grade” to Colombia
The three raters agree on the good economic and
financial performance of the country, highlighting:
 Its ability to deal with internal and external shocks
 Country's long history of timely debt payments
 Increased macroeconomic policy credibility
 Security concerns have been waning
31st May 2011
COLOMBIA: THE C in the “CIVETS”
The World is talking about Colombia…
“Whether on security, democratic stability, or
vibrancy, the strength of Colombia’s
democracy is there for all to see”
Eric Farnsworth, vice president of the Council of the
Americas.
“Colombia has increasingly become a bright
star in the Latin American constellation,”
“While everybody’s been focused on the super
hot Brazilian Economy to the south, Colombia’s
quietly gone and become amazingly investable”
Jim Cramer - 8 February 2011
Walter Molano, Emerging-market analyst of BCP
Securities
“Yet against all odds Colombia has become the
country to watch in the hemisphere.”
Newsweek, July 2010.
According to the Nominal GDP, Colombia is the 36th
greatest economy in the world and 5th in Latin America
Nominal GDP (US$ Billion),
2009
1.800
1.573
1.600
1.400
1.200
1.000
875
800
600
326 309
400
234 234 222 211 195 193 190 187 183 182
163 162 129 127 117 116 109
93 91 89
200
29
0
Source: EIU (Economist Intelligence Unit)
Colombia: A dynamic economy
Comparison of Colombian GDP growth to global GDP growth
2000-2010
7,5%
8%
6,8%
7%
5,7%
6%
4,6%
5%
4%
3,1%
3%
2,2%
4,7%
4.3%
2,7%
2,5%
2%
0,8%
1%
0%
-1%
-2%
-3%
2000
2001
2002
2003
2004
Colombia
2005
2006
2007
2008
World
Source: DANE (National Accounts), EIU (Market Indicators & Forecasts)
Note: * EIU forecast to the World and Latin Focus to Colombia
Note: Last update December 28th, 2010
2009
2010*
GDP Per-Capita has doubled since 2004
Colombian GDP Per-Capita
2000 – 2010 (US$)
7.000
6.136
6.000
5.316
3.677
4.000
3.000
4.608
140%
5.000
5.052
3.354
2.482
2.403
2.356 2.239
2000
2001
2002
2.722
2.000
1.000
2003
2004
2005
2006
Source: EIU (Economist Intelligence Unit)
(23 May 2011)
2007
2008
2009
2010
Enhanced economic performance has come
hand in hand with improved security
16
14
12
10
8
6
4
2
0
-2
-4
16
14
12
10
8
6
4
2
0
-2
-4
World
Crisis
Colombian Growth
Security Perception
Source: ANDI (Asociación Nacional de Industriales)
World Growth
Security Perception
Economy Growth
Colombian GDP Growth Vs. Security Perception 2001 – 2010 (%)
Annual FDI net inflows have multiplied by four
Main Investors in Colombia
2000 – 2010**
FDI, 2000 – I Quarter 2011
US$ Millions
12.000
10.252
10.000
8.000
United States
10.596
• Stock US$ 9,333 M
• Share 28.8%
7.137
6.000
6.656
Great Britain
6.760
3.698
4.000
Spain
2.436
2.000
0
• Stock US$ 4,631 M
• Share 12.8%
1.591
1.720
• Stock US$ 2,637 M
• Share 7.3%
Mexico
• Stock US$ 1,517 M
• Share 4.2%
Variation 2008 - 2009: -32%
Variation 2009 – 2010: -5%
Variation I Quarter 2010 – I Quarter 2011: 132%
*FDI by Exchange Balance
**Participation by country positive accumulated inflows, it doesn´t includes investment or reinvestment of profits in the oil sector, Value 2000
- 2010: US$ 32.462 million
Source: Banco de la República (Balance of Payments) (Central Bank)
Exports have tripled in nine years
Exports, 2000 – May 2011
US$ Millions
Colombia Exports by Country
2010
45.000
37.626
40.000
39.820
35.000
32.852
30.000
22.030
25.000
20.000
15.000
16.191
13.158
10.000
5.000
0
Variation 2008 - 2009: -12,7%
Variation 2009 - 2010: 21,2%
Variation Jan May 2010 – Jan May 2011: 36%
Source: DANE (Departamento Nacional de Estadísticas) ( National Department of Statistics)
United States
• US$ 16.879 M
• Share 42,5%
China
• US$ 1.967 M
• Share 4,9%
Ecuador
• US$ 1,825 M
• Share 4,5%
Netherlands
• US$ 1.617 M
• Share 4,1%
Positioning Colombia as an export platform: 11 free trade agreements
(FTA) with 48 countries allowing preferential access to over 1,500
million consumers
In Force
Signed
In Negotiation
Future
IN FORCE
• CAN (Peru, Ecuador y Bolivia)
• MERCOSUR (Argentina,
Paraguay, Uruguay and Brazil)
• Chile
• G2-Mexico
• North Triangle (Honduras,
Guatemala y El Salvador)
• Switzerland
SIGNED
• United States
• EFTA (Iceland,
Liechtenstein, and Norway)
• Canada
• European Union (Signature)
IN NEGOTIATION
• South Korea
• Panama
• Turkey
FUTURE
• Japan
• Australia
• New Zealand
• Costa Rica
• Dominican Republic
• Gulf Community
2. The growth of
international tourism in
Colombia is over the world
average.
In nine years international visitors in Colombia doubled. While
tourism in the world increased 6,7%, in Colombia this trend
increased 8,9% in 2010*
International visitors in Colombia
by Country – 2010*
Tourism, 2000 – May 2011
Thousand of Visitors**
2.000
1.771
United States
• 345.158 Visitors
• Share 23,4%
1.600
1.639
1.200
Venezuela
726
800
732
841
668
• 197.173 Visitors
• Share 13,4%
Ecuador
400
• 122.076 Visitors
• Share 8,3%
0
Argentina
Variation 2008–2009: 17,2% (includes cruise)
Variation 2009 - 2010: 8,1% (includes cruise)
Variation Jan May 2010 – Jan May 2011: 15,8%
*It doesn't Include cruise
**Includes cruise
Source: DAS (Departamento Administrativo de Seguridad) (National Department of Security)
• 83.674 Visitors
• Share 5,7%
International tourism to Colombia grows
faster than the world’s average
International cruise have multiplied by eight since
2005
Ships
Cruise Ships in Colombia, 2006-2010
Passengers
Cruise Visitors in Colombia , 2006-2010
In the 2010-2011 season, 493,000 cruise visitors arrived in
Cartagena, leaving $US 40mill in revenues
Source: Ministerio de Comercio, Industria y Turismo (SPRC, SPSM, Capitanía de Puerto San Andrés Isla)
*Nota: Cifras preliminares.
The income of foreign currencies because of tourism
has doubled since 2000 to 2010
Income of foreign currencies to the
country from tourism
2000-2010
US$ Millions
Source: Ministerio de Comercio Industria y Turismo, Banco de la República
3. Attractive incentives
for hotel investments
Incentives for Investors
 Income Tax Exemption for 30
years period for hotel services
provided in new or remodeled
hotels between 2003 and
December 2017
 Tax duty exemption and VAT
deferral on Capital Goods
used for tourism exports
 Legal Stability Agreements to
guarantee investment projects
 Tax discounts by hiring new
employees under 28,
handicapped , displaced, or
women over 40 years
4. Strategic
Location and
Connectivity
Just 3 hours from Miami and 5:45 hours
from São Paulo
3:00 hrs
Miami
4:45 hrs
Ciudad De México
5:35 hrs Nueva
York
1:20 hrs
Caracas
Since 2000,
international flights to
Colombia increased
120%
3:00 hrs
Lima
5:45 hrs
São Paulo
5:00 hrs
Santiago
Source: Proexport
6:15 hrs
Buenos Aires
International frequencies have increased 125%
during the past decade
 1.100 weekly
international airline
frequencies
 5.000 weekly national
airline frequencies
Average growth of 9,4% on international
passengers the last five years
Air Traffic- National Passengers
2005-2011 (Thousands of arrivals)
30,5%
14000
7,9%
5,7%
4,0%
11,2%
100%
6,8%
0%
12000
10000
13.942
Average growth national
passengers
2005-2010: 12%
10.681
8.094
8.737
9.234
-100%
9.601
-200%
8000
6000
3.183
4000
3.399
-300%
Air Traffic- International Passengers
-400%
2005-2011 (Thousands of arrivals)
-500%
-600%
2000
-700%
8000
0
14,0%
12,7%
5,4%
3,7% 10,9%
14,7%
-800%
7000
5000
0%
6.232
6000
5.137
5.416
100%
5.617
-100%
-200%
4.558
3.998
-300%
4000
-400%
Average growth
international passengers
2005-2010: 9,4%
Source: Aerocivil
3000
2000
-500%
1.423
1.633
-600%
1000
-700%
0
-800%
5. Hotel Supply and
Demand
Hotel investments have significantly grown on
last three years
HOTEL INVESTMENT
2002 – 2010
(Million Dollars)
1.700,0
2010
900
2009
550
2008
191,1
2007
128,1
2006
2005
2004
2002
60,3
24,8
3,5
Source: Cotelco
There are expected
investments of U$2.200M
for 2011 – 2012
In the last 6 years, 20.000 new rooms have been built
18.000
16.000
15.831
14.000
12.000
10.000
8.000
6.824
(43.1%)
8.594
5.368
6.000
2.300
(26.8%)
4.000
5.070
3.716
2.260
(42.1%)
2.000
1.415
(27.9%)
3.129
1.530
(41,2%)
1.120
(38.8%)
0
Bogotá
Cartagena
Habitaciones
Rooms
Source: Registro Nacional de Turismo and Proexport.
Medellín
Cali
Santa Marta
Barranquilla
Habitaciones
equivalentes
categoria
y 5 estrellas
Rooms equivalent
to 4 and
5 star4hotels
Hotel Occupancy has increased
Hotel Occupancy – Main Cities
November 2010
Source: Cotelco
(
Work index for every 100 rooms has increased
during past years
YEAR
WORK INDEX*
2008
67
2009
69
2010
74
* Rates includes hotels in all categories
Source: Cotelco
Average rate
YEAR
2008
2009
2010
* Rates includes hotels in all categories
Source: Cotelco
AVERAGE RATE*
$209.700
(US $110)
$196.673
(US $ 103)
$206.173
(US $ 108)
6. Employees with
excellent formation and
service vocation
Competitive work force
First in Customer Satisfaction
Customer Satisfaction, 2009
Colombia
Chile
Second in entrepreneurship
Brazil
Peru
Mexico
Entrepreneurship, 2009
Venezu…
Brazil
Argentina
Colombia
0
1
2
3
4
5
6
7
Chile
Peru
According to a survey to foreigners
who visited Colombia, the treatment of
tourists was rated with 4.2 out of 5
Source: Proexport, Napoleon Franco
Venezu…
Mexico
Argentina
0
1
2
3
4
5
6
7
Source: IMD World Competitiveness Report
The most flexible Labor Legislation
The lowest dismissal costs in Latin America
USD 4.000
USD 3.500
USD 3.000
USD 2.500
Payment of compensation
(severance)
for
unfair
dismissal is the lowest in
Latin America
3.768
3.000
2.333
2.000 2.000
USD 2.000
1.667
USD 1.500
USD 1.000
USD 500
Unionization Rate%
USD 0
Source: Ernst & Young Report – PROEXPORT, 2010
16%
14%
12%
10%
8%
6%
4%
2%
0%
14,9%
11%
8%
4,6%
Chile
Venezuela
Perú
Source: IMD, World Competitiveness Yearbook 2009
Colombia
7. Colombia´s touristic
destinations are being
recognized worldwide
“Colombia: One of the 31 Places to Visit in 2010” :
New York Times
The New York Times
Caribbean Sea
Diverse

Barranquilla
Santa Marta
Sun and Beach
Cartagena


Medellín
Santander
Boyacá
Nuqui
Popayán
Huila
Most bio-diverse country per square
kilometer in the world, 10% of Flora and
Fauna in the planet. 37 Natural Parks. (11
million hectares)
History and Culture
Triángulo
del Café
Cali
2,900 km of coastline, and has the third
largest coral reef in the world in San Andrés
Ecotourism/Adventure
Mompox
Pacific
Ocean
Colombia is a multi-destination with diverse
range of climates, landscapes, cultures and
regions: Caribbean, Pacific, Andean,
Amazonia, and Islands.
Sun and Beach
Ecotourism, Adventure
Tourism
History and Culture
Events (MICE)
Cruises

10 UNESCO World Heritage Sites in
Colombia

More than 80 ethnical groups

More than 65 languages
8. Significant growth in
corporate tourism and
world class events
Growth in MICE Tourism (Meetings, Incentives, Congresses, Exhibitions)
Events = Opportunity for new hotels
 In 4 years, Colombia jumped 16
places in the ICCA ranking from
position 50 to 34.
 18 convention centers with a
growing number of events. This
drives the need to increase the hotel
room capacity in cities like Cali,
Armenia, Santa Marta, Barranquilla.
 Development of hotel projects
with large venues (reception rooms)
for events.
International Congress and
Convention Association
International events in Colombia
Event
Highlights
WTO - World Tourism Organization –
General Assembly. 2007
800 Participants and 150 delegates from WTO Country
Members
• ALTA - Latin American and
Caribbean Air Transport Association.
Leaders Forum. 2009
.
494 participants from over 32 countries. 52 journalists
Held for the first time in South America
IDB – Inter-American Development
Bank Annual Meeting, Board of
Governors. Medellin. 2009.
5.000 Participants. 120 journalists. 91,29% Occupancy in 4
and 5 stars hotels.
WEF- World Economic Forum Latin
America. 2010
550 businessman, 200 different Media, 6 Chiefs of State,
from 44 countries.
Some events to come:
• FIFA Soccer U-20 World Cup – 2011
•
VI Summit of the Americas 2013
Cartagena
“The best General Assembly I have ever attended
in 18 years I’ve been with WTO. Very organized,
Colombians are very hospitable, everybody felt
really happy”
Francesco Frangialli,
Former General Secretary World Tourism
Organization (WTO)
9. More International
companies investing in
Colombia
More than 2,500 international companies installed
in the country
City
Bogotá
Cali
Recent cases of
investment in
Colombia
Medellín
Bucaramanga
Cartagena
2010:
Direct Foreign
Investment
US$6,8 Bill.
Pereira
Barranquilla
Recent FDI cases in Colombia
Mar Caribe
 HP instaled one of its five global
service centers in Medellín
 SabMiller recently opened a new
plant in Cali
 Globant, tenth biggest software
company operates in Bogotá.
 Bogotá has de biggest subway
project in the world.
 Emergia, Spanish Call center
company, operates in Manizales
with 1.000 jobs
10. Growing Hotel
Investment
Cases and announcements of international brands
in Colombia
City
Bogota
Cali
Medellin
Cartagena
Barranquil
la
In Operation
In Construction
Announcements
Caribbean Sea
Opportunities for
investment by cities
Barranquilla
Santa Marta
Cartagena
Valledupar
Medellín
Santander
Triángulo
del Café
Ibagué
Cali
Neiva
Beach and Sun
Luxury
Full / Select Service
Limited Service
Cities and opportunities
CITY
DESCRIPTION/OPPORTUNITIES
BOGOTA
Capital of the Republic of Colombia, with eight million inhabitants is
the largest and most populous city in the country. Bogotá is the
main industrial, commercial and economic center and one of the
largest in Latin America. Bogota has increasingly recognized as a
tourist destination with culture at the height of the great capitals of
the world.
Opportunities: Show centers, luxury hotels and limited service
hotels in specific areas.
CALI/VALLE DEL
CAUCA
Cali is the capital of el Valle del Cauca department and is the
third largest population in Colombia (2.8 million). Is the main
urban, cultural, economic, industrial and agricultural center of
the Pacific regon.
Products and segments: History and Culture, Salsa. Business
Tourism and Events (Congresses and Conventions). Nature
tourism throughout the department and the Pacific region:
Ecotourism,
Bird
Watching,
Whale
Watching.
Opportunities: Hotels with selected services or limited
services that complement the growing demand of events in the
Centro de Eventos Valle del Pacífico.
Cities and opportunities
CITY
DESCRIPTION/OPPORTUNITIES
BARRANQUILLA
Barranquilla, with approximately 1.8 million inhabitants, is the
main city in the Colombian Caribbean. Besides being an important
commercial, industrial and cultural port Barranquilla has one of the
most important sea and river ports of Colombia.
Opportunities: Business hotels, limited service hotels in industrial
areas. Currently under construction is a modern convention center
that will require accommodation facilities nearby.
SANTA MARTA
It is a city located in a beautiful bay in the Caribbean, is a tourist
district, cultural and historical heritage of great tourist attractions.
Its proximity to the Sierra Nevada de Santa Marta and Tayrona
National Park also make it a tourism destination of unparalleled
natural beauty. The population of Santa Marta is approximately
450 thousand inhabitants.
Products & Segments: Sun & Beach, History and Culture,
Nature Tourism: Ecotourism, Adventure Tourism, Bird Watching.
Cruises.
Opportunity: Construction of eco-tourism resorts and complexes.
There are currently no international brand presence.
Cities and opportunities
CITY/DEPARTMENT
DESCRIPTION/OPPORTUNITIES
SANTANDER
This department (capital: Bucaramanga) includes a specific
geographical region for its lush plains, mountains, canyons,
rivers and caves. It is the land of adventure sports. Its capital,
Bucaramanga, is recognized as a college campus and as a
major industrial center. Its population is about 2.1 million
people.
Opportunities: thematic and ecological hotels located in
adventure locations. Hotels for the business segment in
Bucaramanga. No international brands are present.
MEDELLIN
It is the second most populous city in Colombia and second
economic center. For its pleasant climate all year round
Medellin is known as the "city of eternal spring. " It is the
capital of Antioquia department that represents over 8% of
national GDP. It stands as a major cultural and industrial
center of the country and for their academic work. Its
population is approximately 3.7 million inhabitants.
Opportunity : Investing in the segment of business tourism
facilities to develop events.
Cities and opportunities
REGION
DESCRIPTION/OPPORTUNITIES
SAN ANDRES Y
PROVIDENCIA
It is an archipelago located in the Colombian Caribbean. The
beauty of his "Sea of Seven Colors" is unmatched. In its natural,
biological richness and traditions of their ancestral population,
UNESCO declared it a Biosphere Seaflower Reserve in
November 2000. This is one of the major tourist destinations in
the Caribbean and Central America. Its population is
approximately 73 thousand inhabitants.
Products & Segments: Sun & Beach, Diving. Corporate Tourism
and Events; arrival Cruises
Opportunity: Construction of Resorts, Hotels Full Services.
Marine Construction.
TRIANGULO DEL CAFE
Consists of the departments of Caldas, Quindio and
Risaralda and is a region located in the center of the country.
It is called el triangulo del cafe because in this region of
Colombia you can find the best coffee in the world. The
population is approximately 1.1 million inhabitants.
Opportunities: Ecological themes hotels. Limited-service
hotels and selected services. In the cities of Pereira,
Armenia and Manizales theirs an opportunity in business
tourism . There is no presence of international brands.
Cities and opportunities
CITY
DESCRIPTION/OPPORTUNITIES
CARTAGENA
Cartagena is a Caribbean city of great beauty and historical
value. It is the most recognized worldwide tourist destination
of Colombia. It is also known as the "Heroic" or "walled city"
counting with the largest walls in the western hemisphere (12
km) built in the seventeenth and eighteenth century to defend
the city from pirates attacks.
The city is known for the preservation of its historic center
and in 1984 was declared a World Heritage Site by
UNESCO.
Cartagena is also a major urban center with about one million
inhabitants and is a growing industrial hub with one of the
largest ports in Colombia.
Products & Segments: Tourism resort: Sun and Beach
(Baru, Islas del Rosario), History and Culture, Cruises,
Business Tourism Events.
Opportunities: Cartagena currently has a deficit of adequate
supply of resort hotels and limited service hotels in the
industrial zone Mamonal.
In Short:
Colombia Offers You:
• Attractive Incentives for investment
• Flexible Labor Legislation
• Excellent Performance and dedication to service
• Stable development policies and increasing security
• One of the highest inbound tourism growth rate in the
world
• Business and MICE Tourism growing significantly
• Colombia tourism destinations are being recognized
internationally
• Investment opportunities in various tourism segments.
PROEXPORT’s services to investors
• Information tailor made to your needs
• Facilitation of contacts with the public and private sector in Colombia
• Setting up of agendas to Colombia
• Aftercare services for investors already established in Colombia
• Free of charge and confidential