Today: September 29, 2016, 3:41 am

Colombia tourism market: 7% CAGR growth forecast between 2013-17
Travel and Tourism in Colombia to 2017 - a new market research report on 2014-03-26 10:29:03
During the review period (2008−2012), tourist volumes in Colombia increased, driven by the country´s improved air connectivity and government initiatives to promote tourism. The country´s inbound tourist volumes expanded at a review-period compound annual growth rate (CAGR) of 8.49% and are expected to record growth over the forecast period (2013−2017) at a CAGR of 6.98%.

However, the government´s expenditure on tourism is relatively low and accounted for only 5.3% of the nation´s total GDP in 2012, valuing US$0.02 trillion. In comparison, neighboring countries such as Brazil and Venezuela allocated US$176.81 trillion and US$10.23 trillion respectively.

Colombia´s GDP is expected to grow by 4.2% and 4.8% in 2013 and 2014 respectively, aided by a revival of private consumption and investment due to monetary stimuli by the Central Bank. The economy is expected to expand at a CAGR of 5.1% over 2015−2017, led by robust domestic demand and enhanced exports due to economic recovery in the US, Colombia´s key trading partner.

The government is providing tax incentives to attract more domestic and foreign investments in the tourism sector over the next 30 years. Exemptions cover new, remodeled or expanded hotels constructed between 2003 and the end of 2017. This measure has prompted small, medium and large enterprises to begin constructing 4,000 new hotels, particularly in the area of ecotourism, by promising to provide a host of new and improved facilities.

According to the Ministry of Commerce, Industry and Tourism, domestic tourism rose by 20% in 2012. The strength of the industry is due to a significant reduction in air fares, an improvement in car travel safety, the upgrade of hotel services and infrastructure, and more focus on tourism promotion.

The Caño Cristales River is becoming more accessible to visitors. The site was closed to the public until 2009 due to the presence and activity of Colombia´s largest rebel group, the FARC, in the area. However, security improvements are making the site more accessible to inbound visitors.

Regional travel is expected to grow over the forecast period. In 2011, Colombia, Chile, Peru and Mexico signed a treaty to improve trade relations, a part of which also includes working together to promote travel. Through Proexport, the Colombian government is working on plans with Mexico, Chile and Peru to synergize regional travel to help promote outbound tourism.

In 2012, Colombian airline Avianca added 1,880 seats on flights to eight destinations across the US and South America. Avianca offers international seats to Miami, New York, Orlando, Punta Cana, Santo Domingo, Havana, Rio de Janeiro and La Paz. Avianca also launched a new non-stop flight on the Bogotá–Havana route. This link between Colombia and Cuba is operated by Airbus A319 aircraft with a passenger capacity of 120.

Colombia´s first Courtyard by Marriott Hotel is expected to open in Bogotá in April 2014. The hotel will have 146 rooms and will be located along Bogotá´s Avenida El Dorado, linking the airport and the city center. This will be the closest hotel to the newly expanded El Dorado International Airport.

In 2012, the car rental market grew by 4.6% to reach COP225.2 billion. Business travel dominated the market with more than 90% of all car rental transactions in 2012. However, the leisure segment posted a growth of 5% compared to 2011.

Travel intermediaries are expected to face competition from increasing online sales, especially in the travel-only and accommodation-only categories. High-spending travelers, who are traditionally underserved in the Colombian tourism market, have been targeted. Such travelers are provided with experiences built around niche interests, helping to increase in-store sales.

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