The hotel industry in Colombia expects to complete the 2010 year with investments of around $1.2 billion USD, up from $900 million in 2009.
According to Jaime Alberto Cabal who is the president of the Hotel Association of Colombia (Cotelco), the driving force behind the boom is a 30 year tax abatement for all new hotels built since 2003 and a 15 year tax abatement for hotels that chose to remodel or expand their current facilities.
In contrast, the hotel union is urging owners and investors to seek out other areas of Colombia to re-invest such as the Atlantic and Pacific coasts. Areas such as La Guajira, the Gulf of Morrosquillo, and areas between Cartagena and Baranquilla are currently underserved and could benefit from new hotel development. The union insists that more hotel development in areas such as Medellin make no sense because of the current level of saturation that has been created as an unwanted side-effect due to the recent boom. The union has warned that an oversupply in large cities, like Bogota, Cali and Cartagena could threaten to lower rates.
Rafael Obando, the president of Avia Hotels disagrees and believes the new hotels being built are favorable because they implement new cutting edge designs and create value-added space with advanced technologies. Mr. Obando states, “”I consider it suitable as it promotes healthy competition, allowing domestic and foreign guests more choices.”
Avia Hotels is also in agreement that ecotourism hotspots such as La Guajira have a lot of potential for future development. Mr. Obando states that “At the end of this year, once we obtain the licenses needed for this type of project, we plan an alliance with the indigenous communities to develop a series of activities that will include their participation within tourist attractions, hotels, and labor, thus providing services and generating employment in the region.”
Colombian newspaper, LA Republica states another $1.5 billion USD is planned for 2011 as tourism continues to grow in Colombia.
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