Focus: Tourism

Something For All

Something For All

Sep. 17, 2015

The current government has launched wide-reaching promotions and injected much-needed investment into the sector, opening up to the private sector for a coordinated effort to manage tourism activities.

Tourism in Ecuador is a growing industry, and the government's sizeable investments in the promotion and marketing of the country as a top destination is a testament to that fact. On May 14th this year, Ecuador launched the second phase of the “All You Need is Ecuador" campaign, committing $9 million to an integrated marketing campaign in the US—part of a total $28 million global budget. “The message is that Ecuador, with its plethora of topographies, people, climates, and experiences are all packed into a small geographic cornucopia (you can visit the Amazon, the Andes, the coast and, conceivably, the Galapagos Islands in one day)," Tourism Minister Sandra Naranjo told TBY. The marketing campaign has already lead to tangible results; Jet Blue recently announced it would begin offering flights between Fort Lauderdale and Quito, American Airlines is upgrading its fleet on the Miami-Quito route, and United Airlines is to increase its flight frequency to Ecuador. The government has also recently implemented a new “Potencia Turística" tax in effect since March 1st, a $10 contribution from tourists entering the country towards infrastructure such as roads, airports, safety, electricity, and education, among other tourism services. The Ministry of Tourism plans to undertake a total of 30 touristic projects by 2017 with an investment of $1.6 billion.

IN NUMBERS

Foreign tourism arrivals exceeded 1.5 million in 2014 according to the Ministry of Tourism, and the World Travel and Tourism Council forecasts this number to grow to 2.27 million by 2024. The top performing months of the year were April and February. Between January and November 2014, the main source markets recorded were Colombia with 333,197 visitors accounting for 23.8% of the total, followed by 232,868 visitors from the US accounting for 16.6%, and Peru contributing 161,370 visitors with 11.5%.

Travel and tourism's direct contribution to GDP in 2013 was $1.657 million, representing 1.9% of total GDP, and is expected to reach $2.65 million in 2014, representing a 2% share of the total GDP. The total contribution of travel and tourism was $4.701 million, represent 5.3% of the GDP, forecast to rise by 4.1% in 2014, and expected to reach $7.574 by 2025, according to the World Travel & Tourism Council. Spending in the leisure tourism segment dominates in comparison to business travel spending, though Ecuador is gaining traction as a hub for business tourism, evidenced by stronger growth in this segment. Leisure spending generated 67.8% of direct travel and tourism GDP in 2013, while business travel reached $940.6 million. Meanwhile, spending in the business travel segment is expected to grow by 5.1%, compared to a 2.3% growth rate for leisure. The World Travel and Tourism Council projects that leisure travel spending will reach $3.165 million by 2024, with business travel spending growing to $1.468 million.

The sector directly supported 118,500 jobs, representing 1.7% of the country's total employment, while the total indirect employment contributed 337,000 jobs, 4.6% of total employment, and is expected to reach 461,000 jobs by 2024. In 2013, visitor exports generated $1.139 million, accounting for 4.3% of total exports. The tourism and travel sector attracted $801 million in investment, a 3.5% share of total investment, expected to rise by 4.1% in 2014, by 4.4% over the next ten years, to reach $1.286 million in 2024—3.8% of total investment. The bulk of spending was generated by domestic travel, at 60.9%, and is expected to grow by 6.3% in 2014 to reach $1.89 million, and to $2.725 million by 2024.

GETTING THERE

Ecuador has two international airports, one in Quito, and another in Guayaquil. Mariscal Sucre International Airport in Quito is the one of the busiest airports in South America, located 18km east of the city center. Serving as the largest hub of Ecuador's flag carrier TAME, the airport runs an average of over 220 flights weekly. José Joaquín de Olmedo International Airport in Guayaquil is 5km north of the city center, is the second busiest airport in Ecuador, and serves as a hub for LAN Ecuador. Domestic flights in the country are inexpensive, and an attractive alternative to lengthy bus rides and relatively poor road conditions. To visit the Galápagos Islands, flights are the only legal way to visit, with th

e exception of those with their own yachts, who are charged exorbitant fees. Flights leave from Quito or Guayaquil, and there are no direct international flights to the islands.

ECOTOURISM

While the tourism sector in general is gaining prominence in Ecuador's diversifying economy, the country's stunning biodiversity concentrated within such a small geographical area makes the ecotourism segment one of the most vibrant in the sector. “Ecotourism is increasingly being perceived as an important source of jobs and income. It is also important for the value chain, especially considering the size of the country," said Naranjo, adding that “Ecotourism is one of greatest sources of potential because of the sheer beauty of the country. It is also a major responsibility because tourism is a long-term undertaking, and we understand that we want to increase not only the quantity of tourists, but also the quality and length of their stay here. Our goal, after all, is to generate revenue for the country." Ecuador was recognized as the World's Best Green Designation in 2014 at the World Travel Awards.

The Ministry of Tourism recently partnered with National Geographic for the National Geographic World Legacy Award, which recognizes achievements from leading companies, organizations, and destinations to drive positive transformation toward a global sustainable tourism industry. Ecuadorian company Tropic Journeys was the winner for the “Engaging Communities" award, which recognizes direct and tangible economic and social benefits that improve local livelihoods. Tropic Journeys is operated by the indigenous Huaorani people in the remote Amazonian region, who set their own wages and share their skills with the rest of the community. The partnership is illustrative of Ecuador's pioneering commitment sustainable practices across sectors. “The reason we decided to partner with National Geographic for the award was that we share the same vision and values regarding sustainability," Sandra Naranjo told TBY, adding, “We have a progressive perspective on tourism and sustainability, and we approach this by recognizing that sustainability and profitability are not mutually exclusive."

DESTINATIONS

One of the most popular attractions in the country has always been the Galápagos National Park, even despite the limited amount of visitors permitted on the islands due to restrictions to protect its ecosystem. However, Ecuador's continental mainland has vibrantly rich biodiversity as well, with ecotourism attractions such as the Napo Wildlife Center in the Yasuní National Park—a UNESCO Biosphere Reserve—in the Amazon region, which is 100% managed by the Kichwa Añangu community, one example of community-based projects in the country geared to benefit local communities and preserve the diverse flora and fauna of the area.

Quito, Ecuador's capital, was named South America's Leading Destination by the World Travel Awards in 2014, when 680,000 non-resident tourists arrived to the city, marking 8.5% YoY growth on the 628,958 visitors of 2013. Peak months in Quito were July when 71,099 visitors were recorded, December with 60,000, and October when 59,460 arrivals were recorded. Quito's so-called “eternal spring" climate, economic stability, and overall favorable quality of life are attracting visitors, as well as international investment. Cuenca was also recognized by the World Travel Awards as the Best Adventure Destination.

Guayaquil is one of the fastest growing destinations in the country, with cruise stopovers regularly arriving from Europe to its port. As Ecuador's largest and most populous city, its municipality has been developing the tourism sector since the late 1990s through extensive infrastructure projects, to showcase its vibrant metropolis, colorful hillsides, and its centerpiece, the riverfront town square Río Guayas' Malecón. According to the General Manager of Grand Hotel Guayaquil, existing hotel capacity is 750 rooms, and new hotels under construction scheduled for opening between 2016 and 2018 will add an additional 1,275 rooms.

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