1. 1. HOTEL INFRASTRUCTURE ATTRACTIVE INCENTIVES FOR INVESTMENT IN THE HOTEL INDUSTRY Exemption from income taxes for a period of 30 years: the exemption will enter into force after the initiation of operations for hotel services provided in new, remodeled and/ or expanded hotels from the year 2003 to December 2017. Exemption from income taxes for a period of 20 years; income from ecotourism services is exempt for a period of 20 years, following the 2003 tax year. Tax and customs benefits for capital assets used for tourism- related exports (Vallejo Plan). GROWTH, CONFIDENCE AND OPPORTUNITIES TO INVEST Libertad y Orden
2. 2. GROWTH IN INTERNATIONAL TOURISM TO COLOMBIA IS ABOVE THE WORLD AVERAGE ARRIVAL OF FOREIGN TRAVELERS TO COLOMBIA 2005 2013 2005 2006 2007 2008 2009 2010 2011 2012 1,832,098 2013 DYNAMIC SECTOR IN CONSTANT GROWTH The arrival of foreign travelers to Colombia has increased from 600,000 in the year 2000 to more than 1.8 million in 2013 with an annual growth of 10%, almost four times the world average and one of the highest in the region. The number of visitors to the country on international cruises has grown sixfold over the last five years. Colombia is becoming established as an important destination on the Caribbean cruise circuit, with three ports in Cartagena de Indias, Santa Marta and San Andres. In 2013, Colombia hosted 139 events, puttingitinthe28thpositionintheICCA ranking. In Latin America, Colombia is positioned fourth, behind Brazil, Argentina and Mexico. (ICCA, 2014). Source: Colombian Immigration Department, 2014 Construction of more than 27,000 homes over the last 11 years. (Portafolio, 2014) Colombia has great potential for investment in various tourist niches (wellness, nature, sun and beach, entertainment and urban hotels). Theluxurysegmentisgrowing.Currentlytherearemorethan20luxuryhotelsdistributed mainlyaroundthecitiesofBogotaandCartagenadeIndias,and7newhotelsareexpected to arrive in the country. Colombia has more than 45 million people and is considered a country with middle to high incomes, according to the World Bank. As of August 2014, Colombia has more than 930 international flights per week. The average growth in passenger traffic for national flights over the last five years was 11.3%. In2012,677studentsgraduatedandenteredprofessionalcareersinhoteladministration and tourism (and other related careers), representing a growth of 75.4% over 2011 (Ministry of Education).
3. 3. NEW HOTELS AND NEW ROOMS IN COLOMBIA 2004-2014 355 2004 2005 8 31 56 61 63 29 35 32 22 20 9 2006 2007 2008 2009 2010 2011 2012 2013 2014 986 1,600 2,272 2,236 2,131 2,655 3,010 2,523 2,677 1,764 INVESTMENT OPPORTUNITIES FOR HOTEL AND TOURISM INFRASTRUCTURE IN THE FOLLOWING SECTORS: WELLNESS TOURISM: Colombia has great richness in flora and fauna, biodiversity and different climates for the development of this product. This biodiversity creates the opportunity to conduct therapy, create environments and develop unique products and experiences related to the symbiotic relationship between nature and wellness. Opportunities: hotel construction with thalassotherapy centers, hydrotherapy infrastructure, and hotels with spas or wellness centers (Business Plan, Wellness Tourism - Productive Transformation Program). URBAN HOTELS: Colombia has nine urban centers with over 500,000 inhabitants that require a broad supply of rooms due to their high level of business and commercial activities. Additionally, the country has become positioned within Latin America as a destination for holding conferences and conventions, requiring a hotel industry with convention centers. Opportunities: full, limited, and select services hotels, and hotels with convention centers. ENTERTAINMENT: Colombia has a reduced supply of entertainment and limited infrastructure for large-scale events. Legislation favorable to investment in the entertainment industry was established via Act 1493 of 2011. Infrastructure investments for large performances will be 100% deductible from income taxes. Non-resident foreigners who provide artistic services in public performances will only pay an income tax of 8%, which will be withheld by the producer or person responsible for the artistic activity, or the payer. Public performances will be excluded from VAT, as well as any artistic services provided in carrying them out. Opportunities: construction of theme parks, show and event venues (concerts). NATURE:Colombiahas53millionhectaresofnaturalglades,22millionhectares of savannah, as well as arid, snow-covered and wetland areas. It is ranked fourth globally in terms of water resources, and its natural parks represent 14% of its natural territory. It is the country with the most biodiversity per square kilometer in the world. Opportunities: Eco-Luxuryhotels,eco-gambling,ecolodgesandcomplementary sustainable infrastructure for nature tourism (nature trails, observation towers, bridges, environmental management infrastructure, etc.). (Business Plan, Nature Tourism - Productive Transformation Program). SUN AND BEACH: Colombias beaches border on the enchanting waters of the Caribbean Sea and the Pacific Ocean. There are world-class attractions such as coral reefs, ecological parks, aquariums, marine museums and ancient city walls, among others. Opportunities: luxury hotels, luxury included resorts and golf resorts. Source: MICT [Ministry of Trade, Industry and Tourism])
4. 4. COLOMBIA, A COUNTRY WITH MULTIPLE DEVELOPMENT HUBS BOGOTA - CUNDINAMARCA CARTAGENA DE INDIAS ATLANTICO MAGDALENA ANTIOQUIA VALLE DEL CAUCA COFFEE CULTURAL LANDSCAPE SANTANDER Hotel occupancy: 57.77% (2013) - Cotelco 2014. General average rate: USD 129.40. (2013) - Cotelco 2014. Hotel occupancy: 54.5%. (2013) - Cotelco 2014. General average rate: USD 175.20 (2013) - Cotelco 2014. Hotel occupancy: 58.83%. (2013) - Cotelco 2014. General average rate: USD 94.20 (2013) - Cotelco 2014. SAN ANDRES Colombiahasaneconomythatissufficientlystableandwillkeepgrowing,andthisisattractive for investment. The arrival of large international brands is proof of confidence in the country. Source: Cotelco 2014; average representative exchange rate 2013: $1,868.90. ALVARO DIAGO, PRESIDENT OF THE IHG FOR LATIN AMERICA AND THE CARIBBEAN. Hotel occupancy: 67.62%. (2013) - Cotelco 2014. General average rate: USD 112.40 (2013) - Cotelco 2014. Hotel occupancy: 50.84%. (2013) - Cotelco 2014. General average rate: USD 99.80 (2013) - Cotelco 2014. Hotel occupancy: 64.0%. (2013) - Cotelco 2014. General average rate: USD 81.70. (2013) - Cotelco 2014. Hotel occupancy: 45.85% (2013) - Cotelco 2014. General average rate: USD 80.20 (2013) - Cotelco 2014. Hotel occupancy: 39.14%. (2013) - Cotelco 2014. General average rate: USD 83.20 (2013) - Cotelco 2014. Hotel occupancy: 43.9%. (2013) - Cotelco 2014. General average rate: USD 80.50 (2013) - Cotelco 2014. MAGDALENA SANTANDER
5. 5. HILTON HOTELS: The American chain Hilton Hotels Corporation inaugurated its first hotel in the Colombian capital, with around 240 rooms in the financial district of Bogota (Calle 73). Hilton also has a presence under its Hampton brand on the Colombian Caribbean, in Cartagena de Indias and Barranquilla. ACCOR: The Ibis Bogota Museo hotel is located in the International Center (one of the most important commercial areas in the city). It also has a hotel in Medellin with 216 rooms. MARRIOTT: The U.S. hotel chain has a presence in Bogota with a 239- room hotel near the city airport. It also has the hotel JW Marriott in the financial district of Bogota, with 264 rooms. It expects to open a Marriott hotel with 180 rooms in Cali. INTERCONTINENTAL: ThearrivalofthishotelchainsHolidayInnbrandinBogota and in Cartagena de Indias stands out; between the two hotels there are 331 rooms. Additionally, there is a Holiday InnExpresswith76roomsinBogota,onewith98inCucuta and one with 170 in Bucaramanga. An Intercontinental is currently being built in Cartagena de Indias. LARGE FOREIGN COMPANIES HAVE CHOSEN COLOMBIA AS A PLACE TO INVEST
6. 6. In 2014, a global study of 234 cities with more than 2,000 people in 32 countriesdeterminedthatMedellinisthebestcityinLatinAmericatolivein. Colombia currently has 13 Cultural Heritage of Humanity awards by UNESCO. In 2011 the Coffee Cultural Landscape was added to this list. British tour operators chose the country as the Long-Distance Revelation Destination in 2013, a prestigious award granted by the magazine Selling Long Haul. Similarly, Tayrona National Park and Lost City in Santa Marta were destinations selected within the best trips category for 2012 by National Geographics Travel Magazine. Cali, the World Salsa Capital, was ranked tenth among the 41 travel destinations recommended in 2011 by the New York Times. TOURIST DESTINATIONS IN COLOMBIA ARE BEING RECOGNIZED WORLDWIDE COFFEE CULTURAL LANDSCAPE TAYRONA NATIONAL NATURAL PARK SAN ANDRES BOGOTA