UNWTO - World Tourism Organization
UNWTO - World Tourism Organization
08/23/2024 | Press release | Distributed by Public on 08/23/2024 05:46
In Latin America, UN Tourism Drives Growth Through Investment
In Latin America, UN Tourism Drives Growth Through Investment
- Americas
- 23 Aug 2024
UN Tourism is leading the promotion and coordination of investments in the sector throughout the Latin America region.
Tourism is increasingly emerging as a fundamental pillar for development in the region, offering ample opportunities for economic growth and community empowerment. To harness this potential, UN Tourism has confirmed its plans to expand its series of Investment Guides and Investment Forums, each focused on a specific country in the region. The guides identify key competitiveness factors to build an attractive value proposition for investors, including information on green and sustainable investments, underlining a commitment to environmental responsibility.
According to UN Tourism Executive Director Natalia Bayona: "Investments in the tourism sector are critical to driving economic growth and job creation. Through these investments, destinations can develop sustainable infrastructure and improve the quality of life of local communities, promoting inclusive and resilient development".
Investments in tourism: a strategic priority at the global level
Between 2019 and 2023, the tourism sector attracted 1,983 announced foreign direct investment(FDI) greenfield projects, with a total of US$106.7 billion in capital investments. This flow of capital has created nearly 260,000 potential jobs worldwide, underscoring the sector's significant role in economic development and job creation.
Between 2019 and 2023, 212 tourism investment projects were announced in Latin America and the Caribbean, with a total of US$20.5 billion in capital expenditure, expected to create more than 73,000 potential jobs.
UN Tourism Executive Director Natalia Bayona says: "Foreign direct investment is crucial for the development of tourism in our member countries. These investments not only provide the necessary capital for infrastructure and services, but also bring innovation, technology and best practices that strengthen the competitiveness of the sector at a global level".
UN Tourism Investment Guides
The UN Tourism Investment Guides, part of the "Tourism Doing Business" series, are comprehensive documents designed to provide strategic support and information for potential investors and policymakers in the tourism sector.
The guides address new innovation and sustainability topics, such as debt-for-nature swaps, green and thematic bonds, national climate change adaptation plans, sustainable financing mechanisms, investments in renewable energy applied to tourism, smart infrastructure development, regenerative tourism, and the promotion of community-based tourism. These approaches underscore the commitment to more sustainable and resilient tourism, aligned with the Sustainable Development Goals (SDGs).
These guides are essential for several reasons:
- Informed decision-making: The guides provide detailed information on regulatory frameworks and potential opportunities in each country.
- Economic development: Highlighting strategic areas for investment, these guides are intended to help drive economic growth and job creation.
- Sustainability: The guides promote sustainable investment practices, aligning with global objectives of environmental conservation and social responsibility.
- Innovation and entrepreneurship: The guides encourage the adoption of innovative business models and the development of entrepreneurship.
- Best governance practices: They support the implementation of best governance practices to improve the business climate and facilitate the identification and promotion of investment opportunities, contributing to the economic recovery of the tourism sector and its value chain.
- Competitiveness: The guides identify key competitiveness factors to build an attractive value proposition for investors, including information on green and sustainable investments, underlining a commitment to environmental responsibility.
- Capacity building for investment promotion agencies: They aim to strengthen the capacities of agencies responsible for investment promotion, providing them with the tools and knowledge necessary to identify and attract sustainable tourism investments.
- Strategic improvement: The guides identify critical points in the current strategy and develop an improvement plan to overcome challenges and maximize investment opportunities.
In addition to the guides, UN Tourism organizes an official launch for each guide within a forum dedicated to tourism investment. During these events, investment opportunities are presented directly to potential investors, serving as a platform to showcase prospects and facilitate valuable connections between investors and project proponents. The forums also encourage informative discussions about the investment landscape and the latest trends in the tourism industry. In addition, these events offer meaningful learning opportunities for host countries, enhancing their ability to attract and manage tourism investment more effectively.
Towards sustainability: green investments
The investment guides include a chapter dedicated to green and sustainable investments, highlighting countries' strategies and commitments to sustainability. This chapter covers national climate change adaptation plans, along with the climate adaptation and investment programs implemented. In addition, green finance, such as thematic bonds and other sustainable financial mechanisms applied to tourism, are explored. Examples of innovative operations, such as the debt-for-nature swaps, are presented, demonstrating how to finance conservation and sustainability initiatives.
Ecuador, for example, with the support of the Inter-American Development Bank (IDB) and the U.S. International Development Finance Corporation (DFC), has implemented an innovative financing system through the largest debt conversion in the world, aimed at marine conservation in the Galapagos Islands. This operation, which includes an IDB guarantee of USD 85 million and a political risk insurance from the DFC of USD 656 million, will allow the reallocation of more than USD 323 million to finance the preservation of biodiversity in the Galapagos marine reserves over the next 18 years. This effort not only contributes to environmental sustainability, but also strengthens tourism and the local economy, demonstrating how debt management can drive investments in conservation and sustainable development.
Continuing collaboration with CAF
In the last year, UN Tourism has presented ten specific guides for different countries around the world and is working on the preparation or updating of another 18 editions. These efforts are supported, among others, by the Cooperation Agreement with the Development Bank of Latin America and the Caribbean (CAF), signed in January 2024. This agreement, focused on promoting the green transition and sustainable investments, aims to prepare tourism investment guides for Brazil, Honduras, Mexico, Jamaica, Argentina and Peru, adding to the initial five for Ecuador, Uruguay, Barbados, Panama and El Salvador.
The guides launched in Latin America have highlighted more than 70 projects seeking investment, with the potential to attract an estimated investment of US$5.2 billion in capex. These projects include a wide range of initiatives, such as tourism master plans, resorts, hotels, visitor centres, wellness retreats, interpretation venues, and conservation centres. In addition, UN Tourism intends to expand its focus beyond traditional tourism investments, promoting projects that improve all types of enablers, such as power distribution projects, ports, cable cars or civil engineering infrastructure.
New investment opportunities
In Latin America, incentives for investment in the tourism sector include a variety of measures designed to attract foreign capital. Most countries in the region have specialized investment promotion agencies, bilateral investment agreements, free zones with special tax conditions, and specific foreign investment promotion laws.
In addition, many countries offer tax exemptions on tourism projects, tax benefits in specific areas, and VAT exemptions for tourism activities. Special visas have also been implemented for investors, digital nomads, and pensioners. These incentives demonstrate the region's commitment to promoting tourism development and attracting investments that drive economic growth.
Investment Guides in Latin America:
- Launched in the last year:
- In the process of being updated:
-
Upcoming:
- Argentina
- Barbados
- Brazil
- El Salvador
- Guatemala
- Honduras
- Jamaica
- Mexico
- Panama