SAN SALVADOR, El Salvador – A world economic crisis, a coup in Honduras and rising levels of citizen insecurity across the region are presenting new challenges to a once-budding tourism industry – Central America’s main economic motor.
Yet the crisis –expected to provoke a 6 to 8 percent drop in tourism to Central America this year – also has a silver lining, according to industry leaders who met last week in El Salvador for the sixth annual Central American Travel Market (CATM), the region’s largest international tourism tradeshow.
“The crisis has forced us to do a series of things we wouldn’t have done in other circumstances, such as promote internal tourism,” said Nicaraguan Tourism Minister Mario Salinas.
And in the case of neighboring Honduras, which has suffered a crippling 70 percent drop in tourism since the military ousted President Manuel Zelaya in June, internal tourism is essentially all that’s left.
Hotels on Honduras’ popular Caribbean island of Roatán, which are normally packed with foreign tourists, are now filled with Hondurans from Tegucigalpa. And that’s only thanks to 50 percent promotional discounts, a desperation move by hotel owners to avoid total vacancy.
Other popular Honduran tourism attractions, such as the Copán ruins, have been seriously affected by the political crisis, while business tourism in the capital has come to a screeching halt, according to sources in the Honduran tourism industry.
The good news for Honduras’ embattled tourism industry is that the cruise lines, which bring some 500,000 annual visitors to Honduras, have not canceled. Nor have the Canadian and Italian tourist groups that booked year-end charter trips to Roatán at the beginning of the year, according to the Honduran Tourism Ministry.
Carnival Cruise Lines has also said it will continue its project to build a new cruiseship dock on RoatánIsland. A $15 million golf resort project on the northern coast in Tela is also moving forward.
But despite some positives, the political crisis in Honduras is threatening to deflower the country’s recently blossoming tourism industry, which grew by 9 percent last year and 6 percent during the first half of this year. Honduras now has two tourism ministers – Ricardo Martínez, who represents the deposed government of Zelaya, and Ana Abarca, who represents the de facto government of Roberto Micheletti. Abarca is the acting minister in Honduras, but her position is not recognized by any other country in the world – making it hard for her to promote tourism abroad. She was not permitted to attend last week’s CATM conference in El Salvador, which was instead attended by deposed minister Martínez, who received the backing of the other Central American tourism ministers.
In a joint declaration of solidarity with Honduras, the ministers stressed that the crisis must be resolved in order to reactivate the country’s tourism sector and its economy.
The crisis in that country, the ministers said, is not just affecting Honduras, but the whole region.
Since the coup, Taca Airlines has been forced to cancel its daily flights from Costa Rica to the Honduran cities of Tegucigalpa and San Pedro Sula.
“There were no passengers on the planes, so each flight meant we were losing a lot of money,” said Fernando Naranjo, president of Taca Costa Rica.
Taca’s problems, however, are more complicated than just Honduras’ political mess. The world economic and financial crisis has led to a 12 percent drop in regional air travel this year, and has limited Taca’s ability to get international financing, according to Naranjo. The confluence of problems, he said, has forced the El Salvador-based airline to reduce its frequency of daily flights or eliminate several flights altogether.
“The world has just gotten much more complicated,” Naranjo told The Nica Times in an interview.
Taca has tried to offset the drop in traffic by lowering the cost of its flights, down almost 10 percent from last year. But that hasn’t stopped the airline from losing ground. Taca, once considered to have a near monopoly on Central American regional travel, now represents only 55 percent of the market, Naranjo said. The other 45 percent is controlled by competitor Copa Airlines, based in Panama.
Opportunity From Crisis
Despite the problems facing Central America’s tourism industry, the mood at last week’s CATM conference was oddly optimistic, at least among government representatives. Several of the tourism ministers noted that the crisis has helped to facilitate regional integration and reaffirm the Central American countries’ joint commitment to developing and promoting the tourism industry.
“All of the countries of Central America are absolutely committed to tourism as a way of fighting poverty,” said Costa Rican Tourism Minister Allan Flores. “This political commitment is important.”
In El Salvador, the nascent tourism industry is helping to “break the chain of desperation” and “generate confidence,” said Salvadoran Tourism Minister Napoleón Duarte.
The Salvadoran minister noted that most Central American tourism is in the hands of small and medium-sized businesses, providing a very “democratic, creative and innovative” industry that should help the region respond quickly to the crisis and bounce back even stronger than before.
“I am very optimistic that tourism is the future of our nations,” Duarte said.
Even in Nicaragua, whose tourism industry has managed to grow during the crisis, drawing a 20 percent increase in U.S. tourists this year, no one is being greedy about the country’s relative good fortune. “We need to promote the region as a multi-destination market,” said Minister Salinas. “We need to integrate Central America as one destination.”
That integrationist message is having a strong echo throughout the isthmus, even in Belize and Panama – two countries historically considered separate from the rest of Central America.
“The crisis has let us reach out to others, but also be embraced,” said Dionne Chamberlain, head of Belize’s Tourism Chamber and president of the Federation of Central American Tourism Chambers Belize, she said, is seeking to integrate more into Central America with new regional flights on Maya Island Air to Guatemala, Honduras and Cancun, Mexico – a move that has helped the small country survive the crisis better than most Caribbean destinations.
“Belize has only seen a 9.6 percent drop in tourism, which sounds like a lot, but Bermuda has seen a 29 percent decrease,” she told The Nica Times.
The crisis, Chamberlain said, has provided a much-needed “wake-up call” to all of Central America.
“I think this is something that’s good for us; we needed to be knocked out of our complacency,” she said. “We need to do things differently, frugally and look for alternative markets. This was the kick in the pants that we needed to revitalize the whole tourism industry.”