Investment-driven tourism expansion propels economic growth in Latin America, under the auspices of the United Nations.
The United Nations Tourism Organization (UNTO) and the Development Bank of Latin America and the Caribbean (CAF) have joined forces to prepare investment guides for several countries in the region. The primary focus of this collaboration is to promote the green transition and sustainable investments in tourism.
The agreement, signed in January 2024, aims to prepare tourism investment guides for Brazil, Honduras, Mexico, Jamaica, Argentina, and Peru. This move is part of an ongoing effort to boost sustainable tourism growth in the region.
In the last year, the UNTO has launched investment guides in Chile, Ecuador, Uruguay, and Peru. These guides have highlighted over 70 projects seeking investment, with the potential to attract an estimated investment of US$5.2 billion in capital expenditure (capex).
The projects include a wide range of initiatives such as tourism master plans, resorts, hotels, visitor centres, wellness retreats, interpretation venues, and conservation centres. However, the UNTO intends to expand its focus beyond traditional tourism investments, promoting projects that improve all types of enablers, such as power distribution projects, ports, cable cars, or civil engineering infrastructure.
Attracting green and sustainable tourism investments in the region depends on several key factors. According to the UN Tourism Investment Guides, these include strong governance, macroeconomic stability, quality infrastructure, digital innovation, integration of sustainability in business practices, and human capital development focused on inclusiveness and just transition principles.
Effective government administration and regulatory frameworks are crucial to attracting investment. Streamlining processes and reducing bureaucratic obstacles, particularly in Caribbean countries, remains a challenge but is essential for competitiveness.
Investors consider government debt ratings and risk premiums. Countries with better ratings, like The Bahamas and Trinidad and Tobago with “Investment” grade, attract more investment compared to those with speculative ratings.
High-quality health, education, public safety systems, and critical infrastructure such as roads, ports, airports, telecommunications, and utilities significantly contribute to destination competitiveness and investor confidence.
The Ministry of Industry and Tourism in Spain, which serves as a benchmark, highlights digitalisation as a key to boosting competitiveness and innovation in tourism. Initiatives to digitalize Small and Medium Enterprises (SMEs) and create smart destination platforms are essential for the region's tourism sector.
Experts involved in sustainable tourism in Latin America and the Caribbean stress the importance of integrating sustainability into business management systems and operations to optimize resource use and enhance market competitiveness.
Equipping communities, especially vulnerable and youth groups, with skills for the green economy—including sustainable tourism—supports a just transition to low-carbon development and enhances the region’s appeal to sustainable investment.
In conclusion, the UNTO and CAF collaboration is a significant step towards promoting sustainable tourism investments in Latin America. By focusing on the key competitiveness factors identified in the UN Tourism Investment Guides, the region can attract the necessary investments to boost its tourism sector and support a just transition to a low-carbon economy.
