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Can Nica Tourism Benefit From Crisis?

MANAGUA – The global economic downturn could have a silver lining for Nicaragua’s tourism industry, according to Tourism Minister Mario Salinas.

Nicaragua’s competitive prices, geographic location, high levels of citizen security and abundant tourism offerings make the country an affordable and attractive vacation destination in times of economic difficulty, Salinas says.

“The crisis could be an advantage for Nicaragua, and that could explain some of the results we’re seeing so far,” Salinas told The Nica Times during an exclusive interview last week.

During the first two months of 2009, tourism grew 10 percent before dipping in March to close the first quarter up 4 percent from last year. In addition, $62 million in new tourism projects were approved in the first three months of the year – almost triple the amount of tourism development projects approved during all of 2008.

The minister said that residential tourism developments, such as Gran Pacifica, are continuing to expand while several large new tourism projects, including the $17 million Pacific Turtle project in San Juan del Sur, have been recently approved by the Nicaraguan Tourism Institute (INTUR) for Law 306 investment incentives.

“In a situation of global crisis, the results here are very satisfactory,” Salinas said. “This is due to the fact that Nicaragua, little by little, is being discovered as a destination. It’s a destination that has a long way to go, but the country has an interesting variety of attractions – beaches, colonial cities, volcanoes and lakes.”

The minister says in a time when people are carefully considering many different factors before deciding whether or not to take a family vacation, Nicaragua is increasingly appearing like “a safe and economic destination” that’s close to the United States and other Central American markets.

The goal and challenge, Salinas said, is to promote Nicaragua’s competitive niches to maintain a modest growth rate at a time when global tourism levels are expected to fall.

In conjunction with the private sector, INTUR is focusing on promoting Nicaragua as a destination for cruise ships, surfing, colonial city tourism, and an emerging option for near-shore medical tourism. Nicaragua also wants to start advertising itself as an inexpensive destination for U.S. retirees.

Closer to home, Nicaragua has taken a series of measures, such as the recent elimination of the tourism visa for Costa Ricans, to encourage more travelers from the rest of Central America, which represents more than 60 percent of Nicaragua’s tourism market.

The lifting of the visa is already bearing fruit. The number of foreign visitors crossing into Nicaragua from Costa Rica increased by 58 percent during this year’s Semana Santa vacations, Salinas said.

Port of Call

Over the past three years, Nicaragua has become an emerging destination for cruise ships on tours through Central America and the Caribbean. Just two years ago, there were 25 cruise ships that made a port of call in Nicaragua’s Puerto Corinto or San Juan del Sur. This year the number is more than 60.

Salinas says leaders of the cruise line industry tell him they are “very satisfied” with Nicaragua and are interested in making the country a regular stop on more cruises.

The minister met in April with the vicepresidents of Royal Caribbean and Princess cruise lines to discuss the situation and analyze ways to improve Nicaragua’s offerings for cruise ships.

Salinas said that in June, Nicaragua hopes to sign a five-year agreement with the cruise lines to help develop the country’s ports and day tours.

The accord would mean millions of dollars in private promotion of Nicaragua, improvement of ports and training and technical assistance for Nicaraguan tour operators and service providers.

Though Salinas says INTUR has to undertake more surveys and studies of the cruise industry to really understand its impact on the Nicaraguan economy, he said the general information they have shows the average passenger spends about $60 in the local economy. Plus, he said, the cruise line industry claims that some 50 percent of the passengers who come ashore for an eight-hour excursion will return on their next vacation.

“They become curious about the country after only seeing a little bit and want to come back,” Salinas said.

Salinas said there’s also talk of building a cruise ship pier in the tourism town of San Juan del Sur.

“That would be a home run,” he said. “The cruise line industry gives us a horizon and a perspective for growth and development.”

Surf and the City

INTUR is also working to promote beach and city tourism by promoting Nicaragua as a destination for surfing, health/medical tourism and colonial cities.

“Tourism is becoming more specialized, so we have to find areas where we have advantages,” Salinas said.

The surfing industry has already proven to be a great way to spread tourism to remote corners of the country (see separate story). But in cities such as Granada and León, their colonial architecture has become one of the country’s distinguishing traits.

“Our clear and evident advantage in Central America is our colonial cities, and Granada is the crown jewel,” Salinas said.

The minister said that INTUR is working with the mayor’s office and the private sector in Granada to develop a plan for tourism development and promotion. INTUR recently took over the installations of the old lake wharf at the end of La Calzada and is in the process of modernizing it into a tourist attraction.

In the northwestern colonial city of León, INTUR is also updating the area’s tourism development and promotion plan.

On April 30, INTUR was granted a $10 million loan from the Inter-American Development Bank to develop tourism plans in the León – Chinandega region as well as in Puerto Cabezas, the capital of the North Atlantic Autonomous Region (RAAN).

Salinas said the money could be used to help restore some historic and crumbling buildings in León, or improve access roads and develop plans for a new airport.

In Managua, INTUR is helping to promote medical and health tourism. In partnership with VivianPellasMetropolitanHospital, INTUR last year participated for the first time in international medical tourism trade shows to promote Nicaragua as a new destination for affordable care.

Importance of Infrastructure

Improving infrastructure is another major part of the Sandinista government’s overall plan for development and poverty reduction. Facilitating travel, new road and port infrastructure is a very important part of improving tourism, Salinas said.

For INTUR, the priority is improving connections with Costa Rica and developing the San Juan River as a tourist destination.

INTUR is well advanced on an ambitious plan to restore and improve the river port town of San Carlos, in an effort to make it a new hub for tourism from Costa Rica.

There are also plans to build a bridge over the river into Costa Rica to form a new land connection.

On the Pacific side, INTUR said it hopes the government can build the first stretch of the long-awaited Costanera coastal road after the end of the rainy season that starts this week. While the rest of the Costanera project remains unfunded, Salinas said INTUR is pushing for construction of the first 30 kilometers from the Costa Rican border to San Juan del Sur, allowing Nicaragua to take better advantage of the nearby international airport in Liberia, Costa Rica.

“The goal is to have that part done a year from now,” Salinas said.

Staying Competitive

The government is also working on ways to remain competitive with its neighbors. One of the proposals is to update Nicaragua’s pensioner’s law with better incentives for foreign retirees. President Daniel Ortega last month sent a bill to the National Assembly with proposals to update requirements and incentives.

“We need to update the law, which hasn’t been touched in 15 years,” Salinas said. “This is a market that we can promote to attract retirees like Costa Rica did 20 years ago.”

In times when money is tight, Salinas said, Nicaragua has a great advantage for attracting retirees on fixed incomes.

Yet despite all the plans and projects, Salinas admits the country isn’t doing enough to promote itself. INTUR’s advertising budget this year is only $1.8 million, about one-tenth of what Costa Rica and several other Central American countries spend on promotion.

Nicaragua is a country that needs more promotion, not less. One proposal to get more funding is to increase the cost of a tourism card from $5 to $10, but the proposal hasn’t been approved yet by the National Assembly.

Salinas, however, says now is the time to cough up more money to promote all of Nicaragua’s advantages and attractions.

“If tourism is growing, it is worth it to invest a bit more in promotion,” Salinas said. “We have a good product, but even the best product in the world doesn’t sell if no one knows about it.”



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