Why invest in tourism infrastructure in Colombia
Colombia's tourism industry has seen significant growth in recent years, driven by the country's diverse landscape, rich cultural heritage, and improved safety conditions. This trend indicates a potential investment opportunity for those interested in tourism-related businesses or infrastructure.
According to the Ministry of Information and Communication Technologies (MICT), non-resident visitor arrivals to Colombia surged to 3.2 million during the first seven months of 2023, marking an impressive 32.3% increase compared to the same period in 2022. Additionally, the first semester of 2023 witnessed a 1.6% rise in air connectivity compared to 2022. Improved international flight connections and air travel accessibility have made Colombia a more appealing destination for global tourists, enhancing the potential for tourism-related businesses.
The occupancy rate during January to June of 2023 increased by 4.5% compared to the same period in 2019, with Cartagena, Bogotá, and Antioquia having the highest occupancy rates. Notably, during the first trimester of 2023, foreign direct investment in commerce, restaurants, and hotels experienced a remarkable upswing of 53.8%, amounting to USD 422 million, in comparison with the same period in 2019.
What makes tourism infrastructure investment worthwhile
Colombia's tourism sector is well-positioned for long-term growth, driven by its natural beauty, cultural heritage, and the country's efforts to promote itself as a global travel destination. Significant investments have been made in improving the infrastructure, including airports, roads, and public transportation, to make it easier for tourists to explore the country and to create new opportunities for business and investors. In alignment with the United Nations’ 17 Sustainable Development Goals (SDGs) for 2030, Colombia’s tourism infrastructure target policy goals such as: 9, Industry, innovation and infrastructure; 11, Sustainable cities and communities; 13, Climate action; and 14, Life below water.
The Colombian government actively promotes tourism as a key driver of economic development. This includes incentives, tax breaks, and investment-friendly policies designed to attract foreign investment in the tourism sector. With decree 2755 of 2003 and Decree 920 of 2009, the Colombian government implemented a series of tax benefits that have greatly energized the sector such as:
- Income tax exemption for 30 years for hotels built before December 31, 2017.
- Income tax exemptions for 20 years for hotels built as ecotourism projects, in areas designated for this purpose like the Amazon, the Sierra Nevada de Santa Marta, La Guajira, and others.
Special rental rate of 15% for 10 years for the development of hotel infrastructure and invest in theme parks in areas that are part of the Development Programs with Territorial Focus in the areas most affected by the armed conflict.
Rent deductions for investments in control, conservation, and improvement of the environment. This includes the acquisition of land for tourism activities that aligns with the conservation and restoration of biological diversity and renewable natural resources.
Recent infrastructure developments in the country
During 2021, ProColombia accompanied the arrival of five projects with business of over US 39 million, in the departments of Bolívar, Antioquia, Cundinamarca and Cauca. These investments have led to the creation of jobs and the establishment of diverse tourism projects, ranging from hotels, residences for seniors, to ecotourism ventures.
Hilton’s Vice President of the Latin America & Caribbean Regional Team, Pablo Maturana, notes that Latin America has around the 10% of the global market and Colombia ranks second in importance for the Hilton and Resorts, following Mexico. By 2023 this brand has 22 functioning hotels in the country and is set to expand with different Hilton brands, contributing to a robust hospitality sector with more than 3.400 rooms.
In 2023, ProColombia has facilitated 17 projects from diverse international investors (United States, China, Japan, Spain, Germany, and France, among others) to settle in key cities from the Greater Colombian Caribbean and other important touristic regions in the country.
In recent years, Cartagena, a beloved destination for travelers, has witnessed the arrival of renowned hotel brands like BlueBay, Wyndham Garden, GHL, RIU, Casa Lola, and Eurostars. The prestigious luxury hotel chain Four Seasons & Resorts has made a significant investment of over USD 1 billion in Getsemaní. Moreover, notable hotels have opened in the area, including the Sofitel Barú Calablanca Beach Resort from the Accor group, the Barranquilla Marriott Hotel, and the Hilton Santa Marta, among others.
Despite its natural beauty and cultural attractions, Colombia remains relatively unexplored by international tourists compared to some neighboring countries. This presents an opportunity for investors to tap into a less saturated market and potentially gain a competitive edge.
To learn more about the opportunities in Colombia's tourism infrastructure projects, the profitability in the tourism sector, and all about the public and private investments in tourism, we invite you to participate in the Colombia Investment Summit 2023, considered the country's most significant foreign investment event. Visit our website for details and to access the event's agenda and other pertinent information.