Through increased flight connectivity and new FDI incentives, the Ecuadorian government is determined to make tourism one of the leading sectors of its economy.
Ecuador is a fast-growing travel destination, and the government is now looking to turn the tourism sector into a long-term economic engine through new initiatives introduced in its Invest Ecuador Tourism program.
The push comes as visitors to the South American nation jumped 51%, going from 1.6 million in 2017 to 2.42 million in 2018, although the entry of a large number of Venezuelan refugees accounts for a portion of the jump.
Long touted as a destination rich in biodiversity, visitors to Ecuador have been attracted by the nation’s four distinct regions, including the world-renowned Galápagos Islands, the Andes mountain range, the Amazon rainforest basin, and the Pacific coast lowlands.
Blessed with natural beauty, the government is now seeking to grow the tourism sector, and FDI in the industry through improved and expanded transportation infrastructure, as well as new incentives to invite international companies, according to Ecuador’s Minister of Tourism Rosi Prado de Holguín.
“The goal is for tourism to become Ecuador’s second-most important magnet of foreign currency after non-renewable resources,” Prado de Holguín told TBY. “We need to significantly increase the figure of 1.5 million tourists per year to achieve this goal.”
In effort to reach this goal, the government has invested heavily in infrastructure, opening three new international airports and renovating 12 existing airports in recent years. At the same time, 7,261km of roads were also expanded and renovated to connect urban areas and ports along the Pacific coast to accommodate the arrival of international cruise ships.
The developments come as Ecuador’s middle class has doubled over the last decade. The nation is advancing its image as a stable and growing economic power, helped by the construction of eight new hydroelectric dams that have doubled the nation’s energy capacity and will further fuel future growth with sustainable, low-cost electricity.
Still, tourism is a priority for the Ecuadorian government and has been boosted primarily by increased flight connections to the US and European nations. In 2018, tourism from Spain increased 75% after Spanish airlines opened direct flights to Quito and Guayaquil, according to Prado de Holguín. In May 2019, Air France also resumed direct flights to Ecuador after a 25-year pause, while the Brazilian Gol Airlines and LATAM Airlines have also increased regional connectivity to Ecuador.
Noting many tourists tend to visit more than one country in the region, Prado de Holguín said his ministry is also working with neighboring Peru and Colombia to provide comprehensive travel packages that would offer comprehensive itineraries including “a visit to Peru’s Machu Picchu, Ecuador’s Galápagos, and Colombia’s Bogotá or Cartagena in a single package, for example.”
Meanwhile, new incentives introduced under the government’s Invest Ecuador Tourism Program have helped drive the ongoing increase in international tourism, which has grown three times faster than the global average in recent years. From business-friendly tax incentives to a liberal visa policy, investment opportunities were presented at the SAHIC 2019 event, a world-class networking summit for tourism and real estate investment held for the first time in Quito.
The push has led to new investments in five-star and boutique hotels throughout Ecuador with support from the government. Such developments are the culmination of reforms over the last 15 years, which have re-crafted tax and customs duties as well as improved mechanisms for dispute resolutions aimed at giving international investors distinct advantages in Ecuador.
In addition, Ecuador has entered various FTAs and double taxation avoidance agreements to boost its competitive edge, and, in 2018, the Productive Promotion and Attraction of Foreign Investment Law was passed to create further incentives for international business owners.