Guatemala has an extensive natural, cultural and historical heritage that attracts thousands of national and international visitors every year. However, transforming this potential into new tourism projects requires something more than attractive destinations: it also demands conditions that generate confidence among investors and allow the development of infrastructure capable of responding to market demand.
The decision to invest in a tourist destination does not depend on a single factor. Before choosing a country, investors analyze how tourists will arrive, how competitive the destination is compared to other markets, and whether the necessary conditions exist to guarantee the success of a long-term project.
For Eduardo Yarto, an expert in tourism product development and former Undersecretary of Tourism Promotion of the State of Guanajuato (Mexico), the decision to invest in a tourist destination responds to a combination of factors that goes beyond tax incentives. He explained that one of the first aspects that hotel chains and international investors evaluate is air connectivity, since this determines the ease with which tourists can reach the destination. “If you are not connected to the markets, it is not so easy for them to go,” he said.
Added to this are elements such as the stability of the country, infrastructure, legal certainty and security. The specialist also highlighted that one of the biggest challenges for destinations like Guatemala is to transform its natural and cultural attractions into differentiated tourist experiences.
In his opinion, travelers are no longer just looking to get to know a place, but rather to live experiences that allow them to connect with the destination. “When you generate that totally differentiated experience from what your competition offers, then you are attracting the attention of the tourist,” he stated.
This is an excerpt from the conversation he had with Free press.
What are the main factors that international chains analyze before deciding to invest in a country or develop a new tourism project?
There are many factors they analyze, but one of the main ones is the country’s air connectivity: what large markets it is connected to and how tourists will arrive to that territory.
Investors analyze how it connects to the end customer through the tourism commercial chain: wholesalers, retailers, tour operators, online travel agencies and all commercial intermediaries. What they seek to understand is how the tourist who bought a product in Guatemala will get to the final destination.
That is a fundamental point. If a country is not connected to its markets, it is much more difficult to attract investment, unless it offers an extraordinary, almost exotic product. In these cases, the lack of connectivity can even work in your favor because it generates an aspirational component. However, when the goal is to attract large volumes of tourists, connectivity is the main factor.
Therefore, the first point that both promotional actions and the strategy to attract investors should aim at is, precisely, that connectivity and the opening to new markets.
Besides air connectivity, what other factors do investors typically evaluate?
The stability of the country is essential. Also, hotels and tourism projects are located in places with special attractions. But there is a very important aspect that is becoming increasingly relevant: the creation of a tourism product. That is, a structured experience that the tourist can buy, live and remember.
It is one thing to visit beautiful places or visit a cultural site; It is quite another to live an experience. You can tour Antigua Guatemala, which is a beautiful city, or visit a natural attraction, but the real challenge is to transform those places into experiences.
The great challenge is to create new experiences to live the Historic Center, the lake, the mountains, the towns and all the cultural wealth that Guatemala offers. When a differentiated experience is generated compared to the competition, the tourist’s attention is captured.
Speaking of the mistakes that countries make most frequently when trying to attract international investments, which do you consider to be the most relevant?
One of the main mistakes is that governments design strategies from the perspective of the official and not from the perspective of the market.
You cannot build a strategy thinking only about what the government wants to promote. Everything must start from the analysis of the markets, trends and what tourists are looking for. Based on these trends, it is necessary to identify what fits with the natural, cultural and historical offer of the country and develop experiences in line with that demand.
The same thing happens with investment. First you have to understand what investors are looking for: tax facilities, qualified labor, stability and operating conditions.
One of the aspects most complained about in Latin America is, precisely, the lack of trained personnel. Today the tourist is also much more demanding and much less loyal to brands. Before, a person could be loyal to a hotel chain; Today most belong to several loyalty programs and simply choose the best option available.
Why are tax incentives important to attract investment?
An investor never analyzes just one country. You are comparing four or five destinations at the same time. Tax incentives will be one of the elements you will evaluate: what benefits exist, what exemptions are offered and for how long.
It is not the only factor nor necessarily the most important, but it is part of the set of variables that determine where you will make the investment. It will also evaluate the size of the market, security, connectivity, available infrastructure and an aspect that has a lot of weight today, especially for European investors: sustainability and sustainability.
From the outside, Guatemala is one of the Latin American countries that is most associated with these concepts, along with Costa Rica. That can be an important competitive advantage when attracting investment.
In addition to that, what other elements weigh in an investor’s decision?
Political certainty, legal certainty, security and connectivity influence. Safety is a very important factor. From the United States, Canada, Europe or Asia, many times what they know about Latin America is news related to insecurity.
They know that problems exist, as they exist anywhere in the world. The important thing is to adequately communicate what the destination does well. Destinations must invest much more in public relations than in advertising. Advertising is always perceived as a paid message; Public relations generate credibility because third parties speak about the destination.
Security must be addressed through communication, without hiding reality. Problems exist, but they normally do not occur in areas where tourist activity takes place. That information must be adequately communicated to investors.
Legal certainty is also essential. An investor needs to know what guarantees he will have during the time it takes to recover his investment and what support he will receive in terms of promotion and incentives.
Tourism also has a great advantage: the money it generates is distributed throughout the entire value chain. A restaurant buys supplies; those suppliers buy from others and so on. Therefore, supporting the investor ends up benefiting many people.
Guatemala has an important natural and cultural heritage. What do you consider to be the country’s main strengths to attract investments and what type of projects could be developed in the coming years?
Without a doubt, belonging to the Mayan world and all the history and culture that surrounds the Mayan civilization represent one of the main strengths of Guatemala. This heritage must become a very important anchor to generate new tourist experiences and attract new markets.
There is also the historical heritage. However, I believe that one of the country’s greatest strengths is nature. Nature tourism should become one of the main spearheads of Guatemala.
These three great elements—Mayan culture, historical heritage and nature—are fundamental to developing tourism products and attracting different market segments. The interesting thing is finding a way to combine them to attract different types of visitors.
There is an important segment related to nature and adventure tourism. Although it is a relatively small market, those who travel in search of these types of experiences usually generate a significant economic benefit.
Cultural tourism, when it offers well-structured experiences, also has a significant expense. Another segment with great potential is medical tourism. Guatemala has a natural advantage due to its connectivity with the United States. That market represents a great opportunity.
However, there is a segment that I consider strategic and that still needs to be strengthened: meeting tourism, that is, congresses, conventions and events. The investment that I consider a priority for Guatemala is a convention center with international standards, designed based on the current hotel capacity and what the city will have during the next twenty years.
How important is the joint work between the Government, municipalities, communities and the private sector to generate confidence among investors?
For an investor, governance is a fundamental aspect. He wants to know how the different levels of government – municipal, state and national – work in a coordinated manner and how businesspeople, academia and, above all, the host communities are integrated.
We often don’t do that last aspect well in Latin America. Communities must participate and benefit from tourism development.
In Mexico there are destinations where large investments caused dissatisfaction among residents because they were never consulted or included in the process. Over time they began to feel displaced by tourism growth itself.
Therefore, development must be carefully planned. Coordination between governments, the private sector, academia and host communities will be one of the aspects that any investor will analyze before making a decision.
If today you were advising Guatemala to attract greater tourism investment, what would be the three or four priority actions that you would recommend implementing over the next few years?
The first thing would be to clearly define which are the spaces where Guatemala wants to attract tourist investment. These territories must be identified and determined what their vocation will be: whether they are beach, mountain, nature, cultural or meeting destinations.
Based on that definition, the next step is to show what infrastructure currently exists and what is projected to be developed in the coming years. That will be one of the first things any investor will analyze.
It is also essential to demonstrate that there is coordination between the different levels of government. It is important to convey that message to the investor. Government leaders must understand that tourism benefits everyone, regardless of political colors.
Finally, we must never forget that an investor always has several options to place his capital. You will choose the destination that offers you the best conditions: a project with clear potential, current and future infrastructure, good connectivity, governance, legal certainty and adequate tax incentives.
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