RESTRICTED

Vol. 2

This report was prepared for use within the Bank and its affiliated organizatiohs.They do not accept responsibility for its accuracy or completeness. The report mlynot be published nor may it be quoted as representing their views.

UNt~K1NA1IiJNA.L DArNI ~J rOR R ±CNSTRUCTIIO1I~N A±'NLJ JJmVi-LJrIVflzi

nwr.,f I *rywt%Ty I T flr'I tTrY r%t .rlWT * (t9IIT I fl,&iN 1 r,R NA 1 1V~JN AL LJ1: V CL'.±VI2Vi N T AD~JA I:IVJAT1N

CURRENT ECONOMIC POSITION

AND PROSPECTS

OF

VENEZUELA

(in see volrCnes)r~

VOLUME II

TOURISM I IT h n T I

1 2 6 C U J W %-

October 12, 1970 _ jC r

Central America and Caribbean Department

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

Basic rate US$1 = 4.50 Bolivares (Bs.)Bs.1 = US cents 22.22

Petroleum export proceeds: US$1 - 4.40 B-livares (Bs.)Bs.1 - US cents 22.73

Petroleum imports: US$1 = 4.48 Bolivares (Bs.)Bs.1 US cents 22.32

SUMMARY AND CONCLUSIONS ............................. i - iii

I. INTRODUCTION . ....................................... 1

II. RESOURCES ........................................... 1

III. PAST TOURIST DEVELOPMENT . ........................... 3

Organization, Policy and Financing .... ............ 3Accommodation ...................- 4

Tourism Generated within Venezuela ................ 5Foreign Tourism ................................... 6Foreign Currency Earnings and ForeignExchange Component .............................. 8

1V. RECENT CIANGES IN LTE PUBLIC AND PRiVA1E SECTORS'ArTITUDES TOWARDS TOURISM ........................... 9

V. PROSPECTS FOR TOURISM DEVELOPMENT .... ............... 10

Analysis of Venezuela's Tourism Potential .... ..... 10Market Considerations ............................. i1Recommended Strategy .............................. 12Medium-Term Projections (1970-1974) .... ........... 19Long-Term Projections (1974-1985) .... ............. 20Forecast of Foreign Currency Receipts .... ......... 21

STATISTICAL APPENDIX

SUMMARY AND CONCLUSIONS

1. Situated in the northernmost part of the South American continent,Venezuela is relatively close to its primary tourist market, the United States.The country's tourist attractions are concentrated (i) on tracts of its Carib-bean littoral which include beautiful, exotic beaches, (ii) in the grasslandsand forests of the Cordillera de Merida, (iii) in the Guayana tablelands whererain forests and varied wildlife evoke a genuine tropical atmosphere, and(iv) in metropolitan Caracas, which holds cultural interests.

2. Tourism has not been given much consideration by the Venezuelanauthorities in the past. No major infrastructural project has been carriedout snecifically aimed at the development of this sector. No funds of anvsignificance were allocated to provide incentives to private investors fortourism. As for nromotion activities, they were non-existent prior to 1964and scarce thereafter.

3. In the public sector, the Direccion de Turismo, the CorporacionNaclonal de Hotels y Turismo (CONAHOTU) and the Corporacion Venezuela deFomento (CVF) have been responsible for tourism development. The functionsof the Direccion de Turismo. a department of the Ministrv of DeveloDment.consisted of making policies and plans. The CONAHOTU, a state enterprise,has been mainly concerned with the develonment of the hotel industry. TheCVF's role in tourism has been the provision of credit.

4. Only 112 hotels out of the existing 1,390 in Venezuela are reportedto be suitable for domestic nleasure-motivated traffic. Of these, no morethan a dozen meet international standards. The lack of even a minimum ofservices and comfort renders the remainine accomodations unattractive to anytype of tourist other than small, local business traffic.

5. Various indications show that many Venezuelans travel extensivelywithin their nwn country. The maiorltv of these trins are- however, forstrictly business purposes. The scarcity and inappropriateness of the resorttnpe nf hot-el encounrAgpe wAelth4ipr Venezuielans to do their nleasure-travellifn

abroad and obliges lower income segments of the population to remain at homefor their holidays.

6. In 1969, 108,203 foreign tourists visited Vene7iel2 Of thesearrivals, 53 percent originated from North America, 21 percent from Europe,14 percent from LTatin America and 13 percent from other countries, On the

whole, foreign tourism increased at an average growth-rate of 22.5 percent_ XChe period 1 loa _r. A1 .Al# lg a o .b S .1 f e-u_e-A-1-1 t^..._

4at

. W LLVU LILC JJC LJA U U.VLtJ .- Vl~ a &u _F. _ V.Otfl._~

have been attracted to the country since 1964 when a number of accommodationsof interr.ation.al standard weecmpleted on the coast .-andt4 ptoir i ia

abroad, business and family-motivated visitors still account for the majorityof foreign tourists.

- ii -

7. The average length of stay and daily expenditure of foreign visitiorsin Venezuela are estimated to be 13 days and $30, respectively. Due to therelatively high propensity of Venezuelans to travel abroad, the "tourismbalance" is largely unfavorable, expenditures (US$134 million in 1969) beingabout three times receipts (US$46 million in 1969).

8. The uncertain outlook for Venezuela's oil sector has recently drawnthe Government's attention to tourism as a possibility for diversifying thecountry's economy. A first step towards coordinating tourism activities inthe public sector was recently taken when one official was appointed presi-dent of both CONAHOTU and director of the "Direccion General de Turismo."Moreover, an overall tourism plan is now being prepared within the frameworkof the projected 1970-1974 Economic Plan.

9. The mission considers that the coastal sections of Los Caracas-Higuerote, Puerto La Cruz-Cumana and certain tracts of the Falcon State li:t-toral are probably the only areas in the country which possess a touristpotential per se capable of attracting a significant number of overseas tour-ists. Attractions existing in other areas such as Caracas, the Andes rangeand the Guayana region may have, on the other hand, a complementary role inthe development of international pleasure-motivated tourism.

10. The U.S. rather than Europe or South America. is likely to be theprimary market for any prospective development of vacational tourism to Vene-zuela. More specifically, the country's promotional efforts should be directedat penetrating the beach and climate oriented segment of the U.S. market wlhichhas supported the development of the Caribbean islands in the sixties.

11. A successful future tourism development strateev should includethe following elements:

a. The principle of geographic concentration of Governmentefforts adopted in the Plan de Turismo draft proposalsshould be further intensified;

b. the tourist development of the 93 km. coastal area, LosCaracas-Higuerote. which combines rich tourism notentialwith proximity to metropolitan Caracas and Maiquetia In-ternational Airport, should be given "ton" priority:

C. this development should be attained thrnugh a nrogram ofintegrated infrastructural work; in order to ensure itsmaximum economic vlabilitvy this progranm should he franmedwithin an overall general master plan for the area to bedeveleped;

d. a re-allnratinn of funds as aaninst the present nattern ofexpenditures envisaged by the Plan de Turismo draft propo-sals ould be effected ir. ch a wa as t (a ol 4 m4 n.tn

- iii -

almost entirely! the infrastructural program for Isla Mar-garita where significant tourist development is renderedproblematic by narrow beaches, insufficient coastal vege-tation, and remoteness from the Federal District and (b)reduce the funds allocated for hotel credit and currentexpenditure;

e. the resultant savings should be redirected to the LosCaracas-Higuerote area in order to increase the finan-cial means for the execution of the infrastructuralprogram mentioned under point c above.

12. Even though the suggested re-allocation would actually be effect-ed, availabilities would probably still be inadequate to meet the financialrenuirementR involved in the imnlementation of Los Caracas-Higuerote infra-structural program. Part of the required financing may well be sought fromforeian lendera: in the context of a aeneral develonment investment and fi-nancing strategy, such borrowing, on appropriate terms, would seem eminentlysuitable.

I. INTRODUCTION

1. Tn the nast. tourism was not given much consideration by Vene-zuelans. The country's tourism potential is thus practically untapped.There are fewer international visitors to Venezuela's 3)OO ckm. of coastthan to the combined shores of the small neighboring islands of the Nether-land Antillpes Reeentlvy however- the need to tievelon new sourree of for-eign exchange earnings has given rise to an increasing awareness of eco-nomin hbnefits that may he derived frnm Pxpanding tni1ritsm Puhlic and

private entities alike are including tourism in their plans for economicdevel opment.

II. RESOURCES

2. CSituated in the northerimost part of the South Americ4an cnt-Fnent, Venezuela has traditionally been divided into four regions:

a. the mountainous north-western area, includingthe Cordillera- de Merida with -eaks soaring to

over 4,000 meters, the Barquisimeto plateau and4Chn CoM mou.nta 4 ns;

b.. tbe coastal zone f1o.n"ed by th 4e Caribbear. mount=U * LA~ A. LA LiL ~ &LLI L .LIUU~A L%J1

ain range (the highest peak, Mt. Niqueta, risingL. 2,6 Meters), whichl stretchLes parallel to the

sea from Valencia to the peninsula of Paria;

c. the llanos region, between the Caribbean range andt'he O.riLnoco RKiver, UULEL.C11 a series of vast

alluvial plains where savanna vegetation predomi-n-ates;

A. the Guayana tabOlelan.ds, to the south of the Ori=

noco River which are covered by dense forests andcoLUprise half oL' the cour.try's territory.

3.* '.rLJ.LC ClOUUU.LJL Lcnions Ln thLie moun tainLous north Llern area vary grea;-

ly according to altitudes, with average annual temperatures decreasing andprecipitatL.on rates i'Lncreasn as tle LanU r'Lses auove sea level. Caracas

and Merida, for example, at 1,000 and 1,600 meters respectively, have ave-rage annual temperatures ofi. .L 9.6 an UU L01 IJ . 'Lvet Lthe lrea equatorial

latitudes of the coastal llanos lowlands, their climates are tropical,with average annual. temperatures of 21-2 - C. Rainfall is X lightL a long Lnecoast partJicularly in its central section (e.g., 350 mm. in La Guaira), andis concentrated in the summer months. In the Ilanos area, rainfall is

heavier and is spread out over the year, while in the Guayana tablelands,typically tropical, high temperatures and abundant rainfall (up to 1,500mm.

annually) prevail.

-2-

4.~ 0n .of ~ the Z r gateways to South erica, Venezuela is relative-ly near its primary tourist market, the U.S.A. A further geographic advan-tage f1or prospectiLVe LUUL.LsU Ue-velo-ymerlt is LLith fac. LUaL Venleue.La is atonce a Caribbean country (the length of its Caribbean shoreline beingseconud only to that of CuDaJ andu part of thLe Southl Almerican continent. Itwill thus be able to benefit from the "image" that each of these two des-tions enjoys on the international tourism market.

5. Venezuela's tourism potential is concentrated:

a. in parts of its littoral - such as the tractsfrom Los Caracas to Higuerote, from Puerto laCruz to Cumana and some of the Falcon statecoastal areas which have beautiful, exotic beachescomparable to the Caribbean's best;

b. in the Cordillera de Merida, wnose snow-cappedpeaks, grasslands and forest evoke Alpine sur-round ings;

c. in the Guayana tablelands, wnere an impenetraDierain forest of white-stemmed trees and lianas,a number of rocky gorges and great waterfalls(Angel Falls, the highest uninterrupted water-fall in the world, being of particular interest),and varied wildlife offer exciting scenery anda genuine tropical atmosphere.

6. The Venezuelan landscape shows great variety and is in itself animportant component of the country's tourism potential. It inspired Colum-bus to report to the rulers of Spain at the end of his third voyage, thathe had found "Paradise on Earth" in the newly discovered regions which wouldsubsequently be named Venezuela.

7. The country also offers a number of cultural and recreationalattractions, including the Bolivar Museum, the National Pantheon, the Cathe-dral, all situated in Caracas-proper, La Rinconada race track (defined as"the most lavish in South America") in the Caracas suburbs and the old, well-preserved German village, "Colonia Tovar" located approximately 60 milesfrom the Capital.

8. Venezuela's infrastructure, including nearly 17,000 kilometersof paved roads, 64 airports (of which 4 are international) and 12 harbors,is one of South America's best and thus offers prospective investors thebenefit of comparatively high external economies.

- 3 -

III. PAST TOURIST DEVELOPMENT

Organization, Policy and Financing

9. Until recently Venezuelan authorities did not attach much import-ance to tourism. Tourism was barely mentioned in the 1965-69 National Plan.No major project specifically aimed at its development seems ever to havebeen carried out, nor were funds allocated for incentives to private in-vestors. Tourist promotional activities were non-existent before 1964 andscare thereafter.

10. The limited Governmental action in the tourist field has beenshared by three institutions: the Direccion de Turismo within the Minis-try of Development, the Corporacion Nacional de Hotels y Turismo (CONAHOTU)and the Corporacion Venezolana de Fomento (CVF), two public agencies. Theseinstitutions operated with little coordination.

11. The Direccion de Turismo's functions have consisted of makingpolicies and plans for the development of tourism in Venezuela: preparirLgthe budget and investment programs, supervising tourism facilities andtheir operation, screening new hotel construction proposals and promotingVenezuela abroad.

12. Promotion activities have been carried out primarily by the NewYork based Officina de Turismo, a Government agent acting under the super-vision of the Direccion General de Turismo. Apart from this agent, theFondo Comun de Promocion de Venezuela, established in 1965 by representat:ivesof leading private industries and the Government, has also been promotingVenezuela abroad, particularly in the U.S. and Canada. Altogether anannual average of Bs. 2.1 million, or $460,000 was spent in the years 1968-1969 -- a sum which appears quite small if compared with promotion expend-itures of other South American or Caribbean Countries. 1/

13. A state enterprise established in August, 1955 with a capitalof Bs. 90 million, CONAHOTU has been primarily concerned with the develop-ment of the hotel industry. Through the years it acquired the ownershipof 12 hotels, including the Humboldt-Sheraton (70 rooms) in Caracas, theMacuto-Sheraton (525 rooms) in the Littoral Central, the Bella Vista (Wes;-tern, 161 rooms) on Margarita Island and the Maracay (Western 157 rooms)in Maracay. CONAHOTU operated its hotels directly until 1966, when itcontracted their management out to the Sheraton and Western InternationaL.Corporations. Because its hotels have been unprofitable on the whole,

1/ In 1968, Colombia spent $1.5 million on tourism promotion abroad,Araentina S2.5 million, Trinidad and Tobago $0.5 million and theBahamas $5.7 million.

- 4 -

CONAHOTU has had to depend on the Central Government for financial back-ing. During the period from 1955 (the year of its formation) to 1963,CONAHOTU invested an annual average of Bs. 9.0 million in accommodationfacilities. This average was down to 1.0 million in the subsequent years1964-1969.

14. The Corporacion Venezolana de Fomento has provided credit fortourism activities, particularly in the public sector. In fact, it hasbeen the primary source of financing for CONAHOTU and other state enter-prises such as the Centro Simon Bolivar, owner of the Caracas Hilton Hotel.CVF investment in tourism rose from the annual average of 0.8 million,registered between 1958 (when CVF was first established) and 1963, to anaverage of Bs. 22.0 million in the period 1964-1969. Altogether CVF in-vested Bs. 115.8 million during the period 1958-1968 in tourist infrastruc-ture and accommodations. This represents only 3.9 percent of the totalamount allocated for Venezuela's overall economic development during thatperiod.

15. Although Venezuelan law requires CVF to provide long-term hotelloans for private investors, there has always been a shortage of suchcredit. In the private sector, commercial banks give loans only on ashort-term basis, usually not exceeding 10 to 15 percent of the estimatedtotal investment cost. As for the mortgage banks, they rarely make loansfor the construction of hotels, their resources being absorbed for themost part by the large demand for housing finance.

16. Detailed information on past public expenditure in the field oftourism is presented in Tables 1.1 to 1.11 of the Statistical Appendix.

Accommodation

17. There are at present 1.390 hotels and guest houses in the wholeof Venezuela. Of these 613 are classified as hotels and provide a totalof 16-A21 rooms, and 777 classified as pensions nrovide a total of 11;550rooms. In contrast with the continuing world-wide trend towards largerhnteelQ the average unit size in Venezuela has declined from 21.5 roomgin 1965 to 19.9 rooms in 1969. At present there are 13 hotels above the100 rronm level, nd 40 hotels with mare than 50 rnoms=

18. The Ve.ezu7elar aiithnriftie estim2te that at nresent only 112

hotels can be relied upon for the development of internal tourism. Ofthes n.ly ahb,ut a dozen meet the at:ndArrc: renipi l f-be internstinnn1tourist market. As for the remainder, their lack of modern hotel servicesa.id comfort renders them unattractive to- a11 tyrupe of tnourists other thansmall local traders.

- 5 -

19. Venezuela's tourist accommodations were clearly planned forbusiness-motivated travellers rather than for vacationers. Their distri-bution throughout the country (see Table 2.1) closely reflects the distri--bution of Venezuela's population and its economic activities. The fewresort hotels that do exist are for the most part owned by CONAHOTU andmanaged by foreign chains and are located in the Andes or in the coastalareas. Single room rates at hotels of international standard range from$18 to $28.

20. Information on the utilization of existing accommodation isscarce. According to Horwath and Horwath's 1967 survey 1/ of the 15 tophotels situated in various parts of the country, the room occupancy rateof "commercial" hotels was probably about 74 percent and that of "tourist'hotels approximately 47 percent. CONAHOTU's records indicate that theaverage room occupancy rate registered by the twelve hotels under itscontrol was 45-50 percent in the last three years. It is important to notethat the current low occupancy rate of Venezuelan resort hotels need notnecessarily be taken as a negative indication of their prospects for futuretourism deve]Lopment. Besides being poorly located, most of them lack thecomplementary services required by today's tourists, particularly in areasnewly opened to tourism. As for metropolitan Caracas, the rate of occupancyof its first-class accommodations dropped to a level of about 60 percentfrom the level well over 80 percent they had reached in the sixties afterthe 450 room Caracas Hilton opened last November.

Tourism Generated within Venezuela

21. Venezuela's extensive road network, 64 airports and domestictraffic figures (see Table 2.2) indicate that many Venezuelan nationalstravel within their own country during the course of the year. By far themalority of these journeys are strictly for business purposes. However, thescarcity of hotels and their inappropriate locations, standards and rates,encourage travel abroad among wealthier Venezuelans and oblige lower-incomesegments of the population to remain at home on their holidays.

22. The main tourist-generating area in Venezuela is the FederalDistrict where as much as 20 percent of the entire population and an evenhigher percentage of the total income produced by the country are concen-trated. The flow of visitors originating in this area already make heavydemands on tourist facilities in the nearby littoral particularly on week-ends and holidays. Other tourist destinations popular among domesticvacationers are the Anides region and Margarita Island. For the most part,Venezuelans take pleasure-motivated trips during 4 specific periods of theyear for a total of 90 days; the school vacation period from July toSeptember, the Christmas holidays, Carnival and Holy Week.

1/ "Operacion Hotelera en Venezuela 1967"

- 6 -

23. The number of Venezuelans travelling abroad rose from 172 thou-sand to 231 thousand in the period 1965 to 1968, at an approximate averagerate of 10 percent per year. The outbound figure was down to 220 thousandin 1969, apparently due to political uncertainties that year.

Foreign Tourism

24. The number of foreign tourists entering Venezuela rose from 21to 108 thousand over the period 1961-1969! increasing at an average annualrate of 25 percent in the years 1961-1964, 22 percent in the years 1964-1967and 19 Dercent in the vears 1967-1969. North America and Europe have beenand are to date the main tourist-generating markets:

Origin of Foreign Visitors to Venezuela

1961 1969'000 Perrent of 0oon Perent of

Arrivals Total Arrivals Total

North America 10 47 57 53Europe 4 19 23 21South America 5 24 15 14Other Countries 2 10 13 12

TOTA. 21 100n lnR 1nn

2_ The great mTnAritu of foreign vicitOrs Arri-oe hb air, the primaryaccess to the country being Maiquetia International Airport. A number oftourists from neighboring Colnmbia, however, drive to Venezuemla crossingthe border at San Antonio. The average length of stay of foreign visitorswas ass,,med bh Venezuelan authorities to be 3 da-s in 1963-1964, a.Ad 8

days in 1965-1966; average daily expenditures were assessed at $40 for bothperiods. As far as the mission could a scert-ain, these esti-mateswee based

on "informed guesses" rather than on actual data. Figures of 13 days and$30, resulIti..g from t&e Statitical tO.ce' s sur vey (E. £tnq uesta tTuricL -0L.

No. 2") have been used for the period 1967-1969.

26. A number of foreign visitors were also attracted to Venezueladuring the mid-sixties when a few accommodation facilities of internationalstandard, notably the 525 room Macuto-Sheraton, were built along the coastand some promotion was started abroad. The following factors clearlyindicate, however, that reasons other than pleasure predominate in motiva-ting foreigners to visit the country:

a. The significance of business-motivated tourismin particular is attested to by the fact thatthe United States, Germany, the Netherlands andthe United Kingdom, important to Venezuela astourist-suppliers, also rank first in terms oftrade with, or investments made in the country.

- 7 -

tourism to Venezuela in general (see Table 2.3)and the low doubleoccupancy rates reported bLyhotels which more frequently accommodate inter-nation.al viasitors, gives furthler evider.ce oheavy business-motivation.

c. Countries such as Spain and Italy, on the otherhand, whose citizens comprieL.L a large segtneitI OL

Venezuela's foreign "colony" (461,000 foreignresidents ir. 1967)vII, a1r e al8-0 p r omi'r. en;1 t ou rist-suppliers. Visiting relatives therefore seem toDe an important 1otLVaLJJIg lacLOr lor presentforeign tourists.

27. Thes latter type of tourist, who usually stays at a relativre'shome and thus naturally tends to stay longer and spend less per time-unithelps to explain the results of the 1967 "Encuesta Turistica" on averagelengths of si:ay and average expenditures; results which would otherwiseappear overestimated 1/ and exceedingly low, 2/ respectively.

28. It follows that Venezuela probably owes the remarkable growth rateof its foreign tourism during the sixties, the second fastest in SouthAmerica, after Paraguay not to the development of its tourism potential,but rather tc, such factors as:

a. the continuous expansion of the country"sforeign transactions;

b. the general improvement of economic conditionsin Europe and North America; and

c. the decreasing cost of international trans-portation.

1/ The 13-day average length of stay of foreign visitors recorded :LnVenezuela. comnares with the 8 days averaae length of stav recordedin Mexico, 5 days in Colombia, 6 days in Paraguay, 6 days in Bermudaand 9 days~ in the Barbados.

2/ Tf it were not for the -onnideration of family mntivaed teourists,the average daily expenditure of $30 arrived at by the "EncuestaTUriStirsk N. 2" would- in faot; apilpar tindereet-imted in view ofthe (i) high proportion of business-motivated visitors who usuallyspend morn than nther vi8itonrs and of (ii) the leavel nf prlcesgenerally prevailing in the tourist hotels.

- 8 -

29. Foreign excursionists and transit visitors are also of someimportance. The former category of visitors, primarily cruise passengerslanding at La Guaira for an 8-hour visit of Caracas, increased from 30,000in 1963 to 74,000 in 1969, while the latter category rose from 26,000 to29,000 over the asae period.

Foreign Currency Earnirngs and Foreign Exchange Component

3o. The arl.nual reports of th Banco Cerapro vide infot4 o.

Venezuela's foreign currency receipts related to the tourism sector. Thesereceipts are arrivd at by tl

1t4ipy4ing the n,hr of tourists by the ave-

rage length of stay, and the product thereof by the average daily expend-iture. The - -- r-- A proAuct 4s sv4hat icerncr d 4 order to taue into

account excursionist and transient disbursements.

31. Different values have been used by the Banco Central for averagelengths of stay and average daily expenditures (see para. 25 above) tcalculate receipts in different periods. However, since there i8 no evi-dence thfat foreign tourism pa t terns, and thL.us either of sA v-alue, ch.-.ged

over the sixties, the sharp jumps from one period to another shown in thereep c .o th a C sries d4Jo n appear.... ..... . ... ............. ...... 7'1..cx eLupL.VV LAJL1UML '.J. C hJ,,.t t^f* ..O C;= CL .. .L. OL.LJ *UI. O^jJL. J L.C^w . *a.

series might be improved considerably by:

a. using the figures of 13 days and $30 forthe~ average lenA.gLtLh of stay aLnd zvere dai.Ly

expenditures respectively, and

b. assuming that these figures were constantover the period 1962-1969.

.The development of Loreign visitors expendiLLture iLr. Ver.ezuela

during this period, both according to Banco Central's data and to thesuggesteU revi'LsiLons 'Ls showrL. below: l/

i~~2J IInl nen IForeign Visitors Ex (1962-1969)

(US$ million)

By Banco Central Revised

1962 3.8 n.a.1963 3.8 14.01964 6.4 18.31965 20.9 23.51966 26.0 n.a.1967 32.5 32.51968 40.1 40.11969 46.4 46.4

l/ A more detailed analysis of the foreign visitors t expenditure inVenezuela is presented in Table 2.5.

- 9 -

33. The missinn estimaten that the direet fnreign AxehanoA cnmnontof international tourism expenditure in Venezuela should be set between15 and 2s perlrent, Ag a strvev has nevpr hben carried nit, ths4a atimate

is based on (i) general economic information about the country and itsnattern nf impnnrts; and (ii) Aata rplpaced tn tha maisionn Wu the ma.n age

of some of the foreign tourism-oriented hotels.

TUI TRprFNT r14ANIWE TIN ThR PTTRT.Tr ANDT PRTUATR CvrTAP<'

ATTITUDES TOWARDS TOURISM

34. The! uncertain oiutlonn fo%r Venezuela' tadti4o4al exor* sectorhas drawn the! Goverment's attention to tourism as a significant possibiliityfor dIvers4Ifyv4In tho romin%r7 s eonomy, or of Incm 4 e^,- fore4Ig

currency earnings and of new jobs. D)uring the mission's stay, a first steptowards Ao-ordi.atir. to-4ism. t4-4- atie inl* thepubl sector was Oal-Len whue;;

one official was appointed both president of CONAHOTU and director of the11"Di-reccion General de Turiosm.o.'' -oevr an _1 oveal tor 1 plan to be

executed within the framework of the projected 1970-1974 Economic Plan is

35. P11arallfel with the VEe-nezuelan G'o-ve--"uen.t's growring cor.eern with.tJ . A C~L CLLC J I. LA LLC VCCC CO&..~VC -IAC*A C LLWt&L

5t.JAtC L .L

tourism, the interest of the private sector in this field has become in-creasin.gly keer A , 1969 a AC.. -L Nzci.al de TLuris wao

in Caracas with the aim of alerting the public to the problems involved.Ln tourisUm devel.opme.t. .LLe L.L.LLon Corporation. ope.eLu Llts 450-rooU hl.otelin Caracas last November, and plans for two other major hotels are alreadyi Lna advanced stages. Or.e oIf thLe FLVJCts.1, poLLsorieLU Uby CAVENDS anIFU ,

involves a 450-room hotel in Caracas which would be managed by Holiday Inns.Tbe second project, -wich will actually comprise two new hotels i beingundertaken by the Spanish hotel/tour operator, Melia: one of the MeliahotelsV. (a 6'JJromU &aciL.iyLJ ). U Uis toLb..LL b L& irL,94.0 9Caacs t Lhe L o (.0J

rooms) would be situated on the littoral, near the existing Macuto-Sheratorn.

36. Late in 1969, several first-class Venezuelan hotels, 3 touroperators andU V AJ1A, tLhe L.Lag arLL crLrL4.L, lached a WA.tIerL pLroLra oL

package tours, based on "Group Inclusive Tour" rates on the U.S. market.ThLI.s partLcu'Lar progrim, offering combined stays in Caracas and on, the

coast for a total of 7 days has proven very successful. On the basis ofactual figures of passergers transported to Venezuela in December, 1769,January and February, 1970, and of reservations made for March and April,

a n 1 I L .i n n lev _…t eit is anticipated th-at an extra l/ u,000 u.a. vacat'oners WiLL nave vILL Ia

the country by the encl of the season. According to information releasedby VIASA, 80 percent of the tour participants have shown marked preferencefor the coastal Macuto-Sheraton, which has consequently been operating atalmost 100 percent occupancy since last December.

1/ That is, in addition to the number of U.S. residents who would havevisited Venezuela had the package tours not been effected.

- 10 -

V. PROSPECTS FOR TOURISM DEVELOPMENT

Analysis of Venezuela's Tourism Potential

37. The mission found that the coastal sections of Los Caracas-Higuerote, Puerto La Cruz-Cumana and certain tracts of the Falcon statelittoral are probably the only areas in the country which possess a touristpotential per se capable of attracting a significant number of foreigntourists as well as Venezuelans. These areas combine a good climate, sandybeaches, tropical vegetation and clear water, precisely those attractionsthat are drawing to the Caribbean area about 1/3 of the total overseastourism generated in the U.S. In Table 2.6, the climatic conditions ofMaiquetia, on the central littoral, are compared with those of three select-ed islands of the Caribbean, Curacao (Willemstad), Trinidad (Port of Spain),and Puerto Rico (San Juan). From this comparison it is clear that Maiquetiahas a similar or even better climate for tourism than any of the otherthree Caribbean localities. While monthly averages of maximum temperaturesare generally lower in Maiquetia than in Willemstad and Port of Spain, andonly somewhat higher than San Juan, monthly averages of relatively humidityare lower. Furthermore, in Venezuela's central littoral precipitationappears to be not only scarce but more concentrated in the year; 92 daysas against 107, 172, 212 in Willemstad, Port of Spain and San Juan, respect-ively.

38. Despite its pleasant surroundings, the Venezuelan part of theAndes has a limited potential for international tourism. It is improbablethat a conspicuous number of U.S. or European residents will look toVenezuela for mountaineering. And tourists from neighboring countries aremore likely to be attracted to other sections of the Andes that are evenmore scenic and famed than the Venezuelan. The Andes region should beregarded as developable mainly for internal tourism.

39. The tropical atmosphere, varied wildlife, and the scenery of thetablelands south of the Orinoco will appeal to certain specialized segmentsof the domestic and international tourist market, such as the "safari-motivated", for example. These features, however, are not exclusive toVenezuelan Guayana but can be found as well all over the larger Amazonasregion, extending beyond the border with Brazil. Furthermore, a largetourist develonment in the Guavana region would, at least in the immediatefuture, be rendered problematic by the costs involved both in the construct-ion of basic infrastructures and in the acquisition of an adenuate market -a market which, being highly specialized, cannot be easily reached.

40. The country does not offer a great variety of cultural interests.Unrtouched by l the great civil4zatl-on-s w-Thich flnourished in rentral or Suth

American in the pre-Columbian era (Inca, Maya and Aztec), Venezuela's his-torical ar.d artistic heritage from this period does not cam-are with thatoffered by some of the other Latin-American countries such as Mexico, Peru,Boliv44iar Colom.ba4. r-uu-s .rA folklore of its autohtbhon.ous pousir

- 11 -

has been much diluted through the centuries by military invasion, gold-prospectors and, more recently, by European immigration. Even the so-calledcolonial style, so typical in many Latin-American countries, does not seemto have found frequent expression in Venezuela. The country does boast anumber of very fine engineering and architectural works. Some of these.like the layout of the Caracas road-system, the University, the cable toMount Avila. are known the world over. However, it is doubtful that: these:works, whose significance is more technical than artistic or cultural, couldof themselves attract European or North American tourists. The concentra-tion of Venezuela's cultural interests in the Federal District, furthermore,undermines their potential for domestic tourism as the Federal Districtitself is the main tourist generating area in the country.

41. It follows that only certain tracts of the littoral are likelyto have a stirong anneal for international tourism. The tourist resourceRexisting in other areas of the country should be regarded as subsidiary tothe development of such tourism. Although none of these alternative re-sources, nor indeed their combination, can of themselves stimulate inter-national travel; they will nrobablv be considered worthy of a visit by aproportion of beach-based foreign tourists to Venezuela.

Market Considerations-

42. Geographic, economic and psychological considerations and marketfrendc ativaP thft I-h: 1T-R rather thann Ftrnone nr 5antth Amerira will bePthe primary market for any prospective development of vacational tourismto Venezuela. Thoercfnre, it ic helipiepd tha the count-ry,'s prom,tinal

efforts shou:ld be directed at penetrating the beach and climate-orientedareas of the U.S. dAmand which have been supportIn.g the past tourist: deve-lopment of the Caribbean.

43. Expanding at an average annual rate of 15 percent over the period1961-1968, North A.merican tourism to the Caribbean has been the faster-roTWingsegment of the U.S. market (see Table 2.7). As a result, some of theCariU bb.eanU is:Lan.As (notLably the Ba"CmasC B ud L --and Puerto Rico) U-v-- Ubee

approaching a saturation point with prices going up to a very high level.Congesti4 onr an,d -- en4ti pri4es semo 4to hnave boen ma in, ,.onnn14le fo

the drop in itourist arrivals which, reportedly, was experienced in theseislands during tth.e winter season 19690-19700. I/

A4. Veinezue'la's prospects of attracting significant flows of T3.e.

vacationers would seem to depend largely on its capability to offer touristfCacil ties wl;ch besde beir.g- cUpeitv ir. terms ofc attractions andL L.LJ.L L.L0 WJ1l±ILL, ULJ=0.UCC U=.L&&L, C.=J=fA.UCLLJV= LLL I.LI . OLLLULL..LA OLU

stnadards, would also hold appeal in terms of price. However, there iscontrasti..g eviden.ce regardi. g Venezuela's actual capabliU tL i . .Les i. thisL

1/ Another possible reason being the recent air-fare reduction ontrans-Altlantic routes.

- 12 -

respect. A favorable indication is the fact that the pattern of rates forexisting accommodations of international standard in Venezuela is lowerthan that of similar accommodations in a number of Caribbean islands (seeTable 2.8). On the other hand, due to the generally high pattern of pricesprevailing in the country, Venezuelan accommodation rates compare unfavor-ably with those in the majority of other South American countries. ThusColombia. a countrv similar to Venezuela in zeograDhic Dosition and naturalattractions and superior in points of cultural interests, offers first classaccommodations at nrices about 30 percent below those of Venezuela. However.from a broader viewpoint, Colombia's advantages should be weighed againstVenezuela's stronger Governmental organization in tourism- its better infra-structure and more readily available capital.

45. Venezuela itself, the richest among the Latin-American countries,offers a signifirant nnptntial dpmand fnr tntuirisrm= The fiitres shown inparagraph 23 above, indicate that in 1969 Venezuelans took 220 thousandtrips abroad. If an alloncAne is made fnr repeated tripn byr tho _An

persons, approximately 2 percent of the population travelled abroad, a great'nany of them for pleasure= RBut another segment of the demand, nrohablylarger, has not yet been satisfied. Many middle-class Venezuelans cannotaffovd the high rost of international travel, and cannot find sititableaccommodation at home. Venezuelan authorities estimate that there are noleoc than 2.5 million npeonle in the ronuntry who are in an income hracketthat would allow domestic vacationing. This figure is probably somewhatoverestimated. !/ Hwou.eer- evxen if only 1 rnillion are acaimead to he in

this position, they would still make up a sizeable potential demand. 2/

Recommended Strategy

46. During extensive discussions with the mission, the Venezuelanau-thorities ir.dicated that the main lines of a nrosnectiua "Plan tie Tuvrisno"

would be:

a. further centralization of Governmentalac +4 .4 v4i- 4- t-r-,.r 4 m-

1/ A propensity to travel equal to 25 percent of the population would,in fact, appear too high when related to the current per-capitaiLncome ($1,0V0 approx.) ir Venezuela.

2/ According to a survey made by CO%DIPIdN, in the Caracas metropolitanarea alone in 1967 there were about 65,000 families for a total of350,000 persons, earning an annual income above Bs. 36,000 (US$8,000)a level which can be assumed as the likely "threshold" compatiblewith the participation of Venezuelans in domestic tourism.

- 13 -

b. emvhasEis on pleasure-motivated tourism, ratherthan on business or family motivated tourism;

c. concentration of Government development effortson snecific areas of Venezuela and sizeable nublicinvestment programs to provide them with theinfrastructure reauired for tourism develonment:

d. institutiton of a system of incentives; includinglow-interest loans and tax exemptions to stimu-late private investment in tourism;

e. updating of legislation and tourism, and simnli-fication of the formalities with which foreignvisitors are now required to comply when enteringthe country;

f. increase in domestic and international tourismrnrmotionn

a_. 8tanhliahmnt nf trainina ounrses fnr hntel

personnel.

47. The further centralization of Governmental action would resultfrom a merger of rnMAOnTU anr. thea D 4irei 4 n Nacion.al de Turismo in.to asingle entity, to be called "Corporacion Nacional de Turismo" (CNT). Thenrew corporation would be responsible for:

a. .^a-- ri4 nating the activities4 of the aIsoMinistries involved in the development oftou r nl in f:ast:urctu:es;

b. directi.ng and supervising hotels owned bynational or regional public institutions; and

c. giving preliminary approval to all requestsfor hotel loans submitted to mmF.

AR8T. I AA4dd4it ro his regular d.ui4-, t-h rNT -r--d4Ant i 4-t ac-

as adviser to CVF on all matters pertaining to tourism.

49. The! Government's decision to stress pleasure-motivated tourismseems rea'listi6,'c ar.d prisi.g In view4. ofteielsiiyofbsns

and family-motivated tourist demand it is unlikely that any official tour-ist pol4cy ai meA at 4is expans4ain wouldA yieA substantial res-t.A. L. j9L.LL.A a.LMC. a L l. JjyieL& ~JfS~7.L~J. s.ubs Canti.a.l A O rslt.a

- 14 -

50. An initial draft of the forthcoming "Plan de Turismo" proposesa total expenditure of 759 million Bolivares. Of this total outlay, Bs. 536million (or 71 percent) would be allocated for direct capital investmentincluding an infrastructural program (Bs. 502 million) and improvements toCONAHOTU hotels (Bs. 34 million); Bs. 150 million (or 19 percent) would goto loans, through public credit institutions for hotels and related touristfacilities; the remaining Bs. 73 million would be used for current expendi-ture.

51. With particular regard to the infrastructural program, a break-down of the Bs. 501 million total allocated expenditure is given below:

(million Bolivares)

LittoralLiLttora'l Cer.;ral Or-iental O;hl'er

Los Caracas LosMaiguetia Higuerote 1rLaLrC%IULL4 O;herL AULUIs ~,caaUcl VLLter TULa

airport 345.3 PI 0.3 64.2 - - 1. 3 - 401 r

SeaportPort - 20.7 - - - - 20.7Terminal - - ±.± 2.2 - - 3

~~~~~~~~~~~~~.. rnt a , fl . 3! a Road - Ju.v - - .U - ±.U jj.U

Sanitation - 10.9 5.9 5.6 - - - 22.4

TOTAL 354.3 41.2 91.9 7.8 4.0 1.3 1.0 501.5

/1 A feasibility study was recently completed by Tippetts, Abbot, McCarthyand Straton for the enlargement and improvement of the existing inter-national airport at Maiquetia.

52. The principle of concentrating action and expenditures on pre-determined areas of Venezuela is sound. However, the concentration conceptcould be intensified greatly in terms of both execution and financing of the"Plan de Turismo;', particularly during the initial stages. 1/ Despitepossible pressures favoring dispersion of Governmental efforts throughoutthe country, final site selection should be mainly determined by ti) the

1/ The development of a single area of high tourist potential within agiven country has proven several times in the past to be the mostexpedient and economic way of promoting the tourist image of theentire country abroad.

- 15 -

intrinsic tourism potential of a given area, (ii) its relative proximity toand ease of access from primary tourist-generating markets and (iii) thesituation with respect to infrastructure already existing thereon or nearby.

53. Application of such criteria would result in major attention beingfocused on the 93 km. tract of Caribbean coast between Los Caracas andHiguerote. The following are factors supporting the selection:

a. The abundance of tourist attractions of thearea including a series of long beaches of whitesand, shaded by dense coconut groves against theextraordinary scenic background of the Caribbeanmountain range along the entire coast; an unusuallybeautiful sea-lagoon near Higuerote, dotted withhundreds of islands and offering a wide range ofopportunities for fishing and water sports;

b. its proximity to metropolitan Caracas, whichoffers interesting excursions for the internationaltourist staying at the seaside, and to MaiquetiaInternational Airport, the main point of entry tothe country; and

c. the possibility of the area being linked withthe Federal District's highly developed infrastruc-tural system at a relatively low cost.

The implementation of a program of tourist development in the area LosCaracas-Higuerote would, to a significant extent, add economic justifica-tion to the project of enlargement and improvement of Maiquetia Internation-al Airport - a project which appears also important from the standpoint ofthe general development of the country.

54. Isla Margarita, for which the draft "Plan de Turismo" proposesan internaticinal airport, a seaport and a costly sanitation system, wouldnot appear to meet the above criteria. Narrow beaches and insufficientcoastal vegetation render Margarita less attractive to international tour-ists. The remoteness of this island from the Federal District diminishesits prospects; for domestic tourism development as well.

55. Concentrating official development efforts and outlays does noteliminate the possibility of, and the market's requirements for a diver-sification of tourist attractions. The international beach-motivatedvacation demand should be given the possibility of varying or concludingsojourns at the seaside with a one or two day visit to other areas of thecountry. The! Plan de Turismo draft proposals for the improvement ofCanaima Airport, amelioration of the Andes road system and construction ofminor infrastructures in various tourist zones of Venezuela (includingIsla Margarita) thus remains an appropriate qualification to the concentra-tion concept.

- 16 -

56. To ensure coordination between the public and private sectors,the criteria of concentration of Government efforts should be applied notonly to the infrastructure programs but also to incentive policies. Finan-cial help and tax relief should be scaled, in extent and/or type, to thepriorities attached to the various areas. Furthermore, incentive policiesshould also endeavour to reverse the historical trend of Venezuela accommo-dation towards fragmentation (see para. 17 above) - a goai tnat could bereached by making incentives available only to those hotel projects whichappear economically justitiable trom the standpoint of capacity (in additionto other criteria). Concentration of incentives is, however, a principlewhich can hardly be expected to find practical application tor the LosCaracas - Higuerote area over the next five years, as the preparation ofnecessary plans and the implementation of infrastructural works will mostprobably take longer.

57. The impossibility of directing incentives in the Los Caracas -Higuerote area in the coming years, as well as the fact that as much as21 million Bs. are scheduled for allocation for the renovation of CONAHOTU'shotels, seems to suggest a reduction from Bs. 150 million to 80 million inthe expenditure mentioned for hotel-credit in the Plan de Turismo's draftproposals.

58. Out of this reduced amount, Bs. 45 million could be used for fi-nancing the two hotels planned in metropolitan Caracas - an increase inaccommodation which appears adequate to meet the likely requirements ofboth business-motivated tourism and vacational, short-visit traffic in thecapital city over the next five years. Bs. 15 million might go for finan-cial backing of the Melia Hotel project on the littoral near the existingMacuto-Sheraton. As for the remaining Bs. 20 million they might be usedto provide loans for the building of:

a. 2 to 3 additional medium-sized hotels in thekey areas of the Cordillera de Merida whereaccommodation of an international standard islimited at present.

b. 1 to 2 small hotels of the guest house type I/in Canaima to meet the demand of the touristswho, after visiting Angel Falls might wish toprolong the pleasure of rain forest surroundings.

c. commercial and resort accommodation invarious areas of the country including IslaMargarita, whenever required by the growthof the internal traffic demand.

1/ Kenya's famous "Tree-Tops" may provide suitable guidelines.

- 17 -

59. A break-dowrn of the total current expenditure (Bs. 73 million)proposed in the Plan de Turismo is presented below:

Bs. million

Promotion and Technical Assistance l/ 40.0Training 4.5Studies 7.8Administration and other 20.7

Total 73.0

60. There is little doubt that promotion expenditure should beincreased from the low level of the past few years. This increase should,however, be gradual and proportionate to the increase in accommodaticinfacilities to prevent the possibility of foreign visitors' requirementsnot being satisfied. As for technical assistance, it is believed - on thebasis of the same considerations as for the incentive policies (see para.57 above) - that CNT will not have many requests for assistance from theprivate sector in the next five years. For these reasons the missionconsiders Bs. 40 million to be in excess of requirements. A reduction istherefore suggested to bring the amount down to Bs. 25 million, an amountwhich seems to be more in line with the promotion expenditures effected bycountries in a similar situation (see footnote in para. 12).

61. Hotel personnel training programs should be concentrated in theyears from 1970 to 1974 in preparation for rapidly rising specializedpersonnel requirements in subsequent years. 2/ Studies should also beinitiated early if the Los Caracas-Higuerote program is to be implementedin time. With this irn mind, the mission estimates that the actual finan-cial requirements involved in adequate training programs and proper studyactivities over the next five years may substantially exceed the amountsindicated in the "Plan de Turismo", (Bs. 4.5 and Bs. 7.8 millions respect-ively). A doubling of both amounts is recommended.

62. The merger of CONAHOTU and the Direccion de Turismo into a single!organization should, at least to some extent, balance the increase inadministrative costs which may be expected to result from increased Govern-mental activity in the field of tourism. An annual average amount of Bs. 2.2million over t:he next five years, as against Bs. 4.1 million indicated inthe Plan de Turismo draft proposals, would appear more consistent with pastexpenditures.

1/ Promotion, rather than technical assistance, will be likely to absorbmost of tnis particular allocatiou. VenezuelaU auhnorities understaUd"technical assistance" to mean the provision of various types of inform-ation to prospective investors - e.g., data on availabie sites, infra-structural conditions, loan procedure, market trends and tourismregulations.

2/ The nossibilitv of establishing at least one regular hotel school by1973 shoulld be carefully examined.

- 18 -

63. The revision of the draft Plan de Turismo's proposal suggestedin the preceeding paragraphs may result in a saving of Bs. 172 millionfrom (i) reduction of infrastructure works envisaged for Margarita Island.(ii) reduction in the hotel loan program and (iii) reduction in currentexpenditures. In the mission's view that sum could be redirected to theLos Caracas-Higuerote area.

64. A comparative outline of the expenditure indicated in the Plande Turismo draft proposals and of the modifications suggested by the missionis given in the following table:

(in million Bolivares)

As from SuggestedPlan de Turismo Revision Balance

Fixed Investment

Infrastructural Program

Maiquetia InternationalAirport 354.3 354.3 -

Los Caracas-Higuerote 41.2 213.2 +172.0

Other areas (mainly elimina-tion of Margarita Inter-national Airport) 106.0 16.0 - 90.0

Renovation to CONAHOTu Hotels 34.0 34.0 -

Hotel credit 150.0 80.0 - 70.0

Sub-Total 685.5 697.5 + 12.0

Current Exnenditure

Promotion and technicalassistance 40.0 25.0 - 15.0

Training 4.5 10.0 + 5.5

Studies 7.8 15.0 + 7.2

Administrative costs 20.7 11.0 - 9.7

Sub-Total 73.0 61.0 - 12.0

TOTAL 758.5 758.5 --

65. Even with the re-allocation suggested, available funds are likelystill to be 4iradequate foraTOS Caracas- n.a,,rs developer.t progrm.The Venezuelan Government, therefore, may well wish to borrow abroad forfi4 nanc-ing cert4a-in portions of such a prognr.

- 19 -

66. Concentration of Government efforts in the area Los Caracas-HiRuerote wouLd best be implemented through an integrated program of infra-structural work including roads, sanitation, electrification and the like.In order to ensure maximum viability for the program, it should be setinto a genera:L master plan that would specify the location of focal zonesor development nuclei within the area under consideration and be inclusiveof market anaLysis and a long-term, land-use plan. In order to preventland speculatLon. furthermore. it would be advisable for the Government topurchase the strategic tracts of the littoral at an early date.

67. Some additional points on strategy for the development of LosCaracas-Higuerote coastal area include:

a. an expansion of domestic tourism in the area -only a two-hour drive from metropolitan Caracas -should be considered subsidiarv to rather thancompetitive with foreign tourism; accommodationthat would be built nrimarilv for foreian customerscan be better utilized throughout the year and morenrofitable if used by domestic visitors in the off-

season which coincides with the Venezuelan vacationmon ths (.Tiine-5$en temlher '

b. a tendpnrv to focus interest onnlv on very expensiveaccommodation should be resisted; in fact, a signi-ficant pronortion of new accommodations in the L.os

Caracas-Higuerote coastal area should probably bedesigned for a omhb in.atiOni, of good st-andards- and

reasonable rates; 1/ tourist villages that involve

ly popular with the international vacation market,

Medium.-Term Pro4ectiona (1Q70-1974')

68. As n.o substantial change can be predicted in the factors wbich

have so far been responsible for the growth of business and family motiva-ted foreign tourism to Venezuela, such tourism may be Pnpectad to continie

developing according to the trends of previous years. 2/

1/ Other development considerations not withstanding a price-consciouspolicy appear higly sdvasable in. view of( t ic … l c

of vacational tourism resulting from both the continuous process of%4w^_ U4. X-t ;th -a-t.1 ne -lre. -saugssmentedo importantes oroftzvx.WSQa .avJ*. v,~ fl-l b4 0W . z_ . in . .. a... t o - _^_

family tourism, and (ii) the necessity of co*nteracting the competitionof lEuropean. tourrist resorts wh.ich& is ir.creasir.g in proportior. to the

reduction in trans-Atlantic fares.

2/ Due to the high proportion of foreign business and family motivatedtourism to that of total foreign tourism in the sixties, the trendof the former can be assimilated to that of the latter.

- 20 -

69. Consideration should be given to the favourable outlook forincreaepd nrnmntinnnl Pnpenditlire and ton UVnPzuea'Q tonurist nnptntial.

The increase in the number of holiday makers may then be expected topairallel increases in aneinmodation in the cnoatal arnea The most plausi-

ble assumption is that only the Melia Hotel project will be implementedduring the -eriod under con ratinnand that 4t. will nommirenre "oprat4nn

at the beginning of 1973. Forecasts based on this primary assumption arepresented in Table 2.9. They show an incorea in fore4in tougrilsm fvrom lAP

thousand arrivals in 1969 to 212 thousand arrivals in 1974.

Long-Term Projections (1974-1985)

70. The accuracy of forecasts generally tends to decrease thelonger the period involved. Nevertheless,a pro4ected of foreig tourIsmup to 1984 has been attempted to give some idea of the increase in inter---t4onal tourism which may result from. a 10-yeanr deveAlopemnt plarn for

Los Caracas-Higuerote. Six sets of forecasts are presented in Tables 2.10to 2.12 .aseA or. Aiferer.t assmptios.s as to( theI,A ----- -f -- or.se

from private investors, both Venezuelan and foreign, in building accommo-dat-on fac4i4-4es on -he Los Caracas-.iguerote coast-al str4p after com4ple=tion of the infrastructural program, and (ii) the degree of response fromintern,at-io.al, pleasure-o-4motiv-atd touris.,.. Ac.oA4r.-g t- these fast---- -foreign tourist arrivals would rise from 212 thousand in 1974 to between540k thousand (lowest forecast)% anA 1,181 thousand (highest forecast) ir

1984.

71. The range of corresponding percentages increases in arrivals(10 percer,; - 19 percent) appears to LDe consister.t wih:

a. Loreitgn tLouriLsm world-wide uev e lopmuent* pattLerns,

(11 percent growth over the period 1961-1968);

b. growth of U.S. tourism to overseas destinations,(13 percent over the period 1961-1968);

C. growtn or U.S. Lturism UUemanu LU Lt'ne: Iar.L'UDeLanarea, (15 percent over the period 1961-1968); and

d. growth of foreign tourism experienced by indi-vidual Latin American and Caribbean countriesincluding Mexico (13.5 percent over the period 1961-1968) Bermuda (12 percent over the period 1961-1968),Bahamas (17 percent over the period 1960-1968), DominicanRepublic (12 percent over the period 1961-1967), Trini-dad and Tobago (10 percent over the period 1961-1967).

- 21 -

Forecast of Foreign Currency Receipts

72. Foreign currency receipts from tourism have been projected on thebasis of (i) forecasts relating to the increase of foreign visitor arrivalsmentioned in previous paragraph and of (ii) a 13-day and $30 average lengthiof stay and daily expenditure for business-motivated tourists and 7-day and$30 for pleasure-motivated tourists.

73. Six sets of forecasts are shown in Table 2.13 based on theseassumptions. Accordinrg to the more pessimistic set, foreign earningsfrom tourism will havej increased to $170 million by 1984. According tothe more optimiistic they will have increased to $324.2 million.

STATISTICAL APPENDIX

LIST OF TABLES

Table No.

I. SUI4ARY OF PUBLIC EXPENDITURE ON TOURISM

1.1 Summarv of Public F,xpenditure on Tourism both in thp Past anciand in the Next Five Years

1.2 .Srnmqrv of Piiblic Eynpnditurp on Tourism (1960-69)1.3 Current Public Expenditure on Tourism (1966-69)1J) CVG Gapnit71 Ryninnditiirp. on Tourism (1958-69)1.5 Capital Expenditures by CONAHOTU (1955-69)1.6 Eprnendi+ures on Tourism - Government Pronection (1Q70-74)1.7 Expenditure on Tourism - Mission's Projection (1970-74)1 -8 Det+ailsz rn Prnoectedj Capital ThnelnditinrR - Mission's Proiection

(1 970-74)1 .9 Foreign Exchange Components of'T vrfr rc+llr1v.n Inves.otm

Costs (1970-74)1 .10 Estim.ated Credit Program by CV? (1970-7 )1.11 Comparison of Government and Mission Projections

II.- MT..T.T.AWMTtfl

2.1 Venezuela - Accommodations by Region2.2 Domestic Traffic Statistics2,-3 Seasn-o Patter?ns of V-ore n Toursmcy0 - - - -n+.--vc --# - - S-. - - -`.

2.4 Foreign Visitors' Traffic (1962-69)2.5 Foreg Cur ency T?-+c-i-- (10A6-Ao)

2.6 Comparison of Climate Conditions Between Venezuela andSel.ected .Caribbean CountriesO

2.7 Number of U.S. Visitors to Selected Destinations (1961-69)2.8 A ola o --f 1Q69 Fi;rst Class Hote1 Pat+es Jn +the la-;'leanC* '. VVJ1J4IQJO. .J.ALO I I 7- 1 .L.7 L - 1. UL0. JAl LI L lAd. L .L i l %JL L 'JLU I

2.9 Projection of Foreign Visitors Arrivals (1970-74)2.10 P fro jectn,ior. of P7.easure r.otivadlue 'oreign Tour.Ls I' 'L .L

In Venezuela (1984)£ * II r.UJtCI.~UU 0V1 IA.LUIi1cL~ul dLU ±TL ~±U I 1 _L .LU ±112.11 PojecQon of~cursonistand rans en' Traffci

Venezuela (1 975-84)21 * o TotalJ~CUiUI 0 U d relgn ±uurist Arrivals ia n I >1 2.13 Projection of Tourist Foreign Currency Receipts in 1984

Table 1 .1 SIJMMARY OF PUI]LIC EXPENDITURElS ON TOURISM BOTH IN THE PAST AND IN THE NEXT FriE YEARS

(in Bs. million)

Accommodation ArnnuaL Tot-+l.CTh9-1Y9T Average 1970 1971 1972 1973 197h4 (1970-1974)

CurrerLt Expendiltur e

Direccion de Turismo 11L.8 :3.0 6.:L Ll.t/-12.5 13.5 14-5 57.6Transf er lto Conahotu 18.5 Is.6 3.4 - 3.4

Total 30.3 9..6 9 T 11.0 12 .5 17.53 T125 Zi.3

Capittl Expenditure(1958-1969)

CVF Fixed Asset lo.6 (.9Shares 0 3.4- - - _ -

Loans 814.4 17.0 5.0 8.2 2;2.5 21.0 23.5 'Bo.2

Total 13'4 1) .3 7 -;72 T22.5 E 0 23.5 .2

(1955-1969)

Conahotu Fixed Asset 61.5 4.1 5. 0 14.0 15.0 15.0 3.0 52.0Shares & Loans 26.1 IL.7 - - - -

Total ___. __ __ TI1 W.0 7___________

1/ Establishment of the new organization, Corporacion Nacional Turismo, is envisagedand the expenditures are integrated from 1971.

Source: Direccion de TurismoCorporacion Venezol ana dea FomentoConahotuMission's Es timates

Table 1.2: SURThARY OF PUBLIC EXPENDITURES ON TOURISM (1966-1969)

(in Bs. million)

1966 1967 1968 1969 Total

Current Expenditure

Direccion de Turismo 3.3 3.0 3.0 2.5 11.8Transfer to Conahotu 5.9 5.9 3.3 3.4 18.5

Total 9.2 .9 O6.3 5.Y 30.3 20.3%

Capital Expenditure

CFV - Fixed Asset 1.7 4.9 1.0 1.6 9.2Others 19.5 56.1 11.8 18.0 l05.4Sub-Total 01. T5l.6 TTh4.6 77.0%

Conahotu-/- Fixed Asset 1.0 1.0 1.0 1.0 4,0Others _ _ _Sub-Total 1.0 1. 1.0 1.0 4.0 2.7%

Total Capital Expenditure 22.2 62.0 13.8 20.6 118.6 79.7%

Total Expenditure 31.4 70.9 20.1 26.5 148.9 100%

1/ Capital expenditure by Conahotu was taken from the average annualexpenditure from 1964 to 1969 as to the figures in the Table 2/3.

Source: Direccion de TurismoC.V.F.Conahotu

Table 1 ._-j: UULUizI XUXC.U.L rAXIADN.LIUITIrnE ON IVuXnLIM (19y66-1y99j

(ii nBs. :OOUO)

1966 1967 1968 1969 Total

Direccion de RTrismo

Administration & Other Exp. 1,185.0 1,273.9 1,298.9 1,347.5 5,105.3

Promotion 2,156.7 1,699.1 1,704.1 1,110.9 6,670.8P.R. & Advertisement 1,000.0 1,000.0 1,000.0 637.8 7,637.8N.Y. Office 357.5 323.1 323.1 323.1 1,326.8Expo in New 'ork 799.2 376.0 - - 1,175.2Fondo Comun - - 381.0 150.0 531.0

Total 3.341.7 2.973.0 3.003.0 2.h58.4 11.776.1

Conahotu

Conahotu 4,930.0 4,930.0 - - 5,860.0-__ _ _-" no _ e et -I ea rluon u tu- w- u WLOJ - - vL V. V , I /.,427u.V

Oficina Central 990.0 990.0 500.0 600.0 3,080.0Teleiaeico (Merida) - - 1,111.0 1,110.0 2,221.0Hotel Sheraton - - -_-___

Total 5,920.0 5,920.0 3,339.0 3,4ho.c) 18,619.0

Source: Direccion de TurismoConahotu

M- n- I I r nTlC f. A T`V`W AT ~'rfl T-ITT`rrIT`MT T' C' nIIT Mf\TMrIC. f -I,Cr'O , ZnTabLe 1.4; CVr IU U±.±IPUj hAIrD,DJJJ±UInUES OI ±VURLOiI (1958U-19)1J

(n-I Bs. ILL--.UII2o)

a) By Years

Year Amount Year Amount

1958 0.2 1964 3.61959 - 1965 12.31960 0.2 1966 21.21961 - 1967 61.01962 3.5 1968 12.81963 1.0 1969 19.6

Total 135. 4

b) By Items(1958-1969) (%)

i. Direct investment (Fixed Asset) lU.6 O

ii. Shares 40.4 30iii. Loans 84.4 62

Total 135.4 lo

c) Average Annual Capital Expenditure

1958-1963 1964-1969 1958-1969Total Annual Av. Total Annual Av. Total Annual Av.

rLxedU Asset .4 0J.1 1L0. 4 1 . 1 0.V 0.7

Shares & Loans 4.5 0.7 120.1 20.1 124.8 10.4L&.7 VU 1a0. .J2 C.LU 4 LJL

Source: C.V.F.

1 /Table 1.5: CAPITAL EXPENDITURES BY CONAHOTU (1955-1969)

(in Bs. million)

_________ i964~-i969 195S-1969Total Annual Av. Total Annual Av. Total Annual Av.

Fixed Asset 3/ 553 6.1 6.2 1.0 61.5 .1QL.fares & CC WULL_U t,- 2o.L 2.9 - - 26.1 1.7Total Gross Outlay 9.7 0O 7 1.0 77Z :.

1/ Figures shown in the Balance Sheet

(1955-1969)1963 1969 Total (% )

Fixed Assets 55.3 6- 61.5 70Shares and Loans 26.1 5.9 26.1 30

=1_ 77 77 H=7, 6 R-F

IJote: "Shares and Loans" Assuming that 1963 was the peak for theamount invested in shares and loans throughoutthe operation period (1955-1969).

2/ Fixed Assets: Lne total capital expend tur-e on f',xedu asse'rsincluding deferred expenses from 1955 to 1969is talkeIn fror, 4.e. accur ' tdgosfigre

before the depreciations in the 1969 Balance"11 U.

3/ ares eCeis The total capival exe kdiQue wn shares wxdcredits from 1955 to 1969 is taken from the

OA. L,u. 1 .. a,, I~. 5~. ~ ****~~.L A&W-AL.Jfl ~. . 4k2 U2A_acc,-,,- 'atedI gross figures sho" in +I-he 10°63Balance Sheet assuming that CONAHOTU hasmla'- transacti'ons b'y transferrng the1lo.of investment in shares and credits to theoI41er AUL"LoI LUL. IbUt LIo Ll the f.L.xeU asses,

since 1963 rather than spending more for

Source: Conahotu, and.Iission's Estimates

Table 1 .6 EXPENDITURES ON TOURISM

(Government Projection)

(in Bs. million)

1970 1971 1972 1973 1974 Total

Current Exp.

Promotion & Tech-nical Assistance!/ 6.o 7.0 8.o 9.0 10.0 4o.o

Trainina. 1.5 1.0- 1.0 1.0 - 4.5Studiesl/ 1.5 2.9k' 1.7 1.4 0.3 7.8Others3/ 1.1 7.3 6.8 3.5 2.0 20.7

Total-10.1 18.2 17.5 14.9 12.3 73.0

Canital Exn.

Airnorts2/ 16.4 63.5 99.1 119.1 122.1 420.2Seaports./ 3.2 5.6 5.5 5.0 4.7 24.oTourist Roads2/ 5.3 14.7 8.o 7.0 - 35.0Sanitation_2/ 2.2 10.1 10.1 - - 22.4Renovation of Hotels3/ 4.0 11.0 6.o - - 21.0Others3/ 0.9 5.1 3.2 2.2 1.6 13.0

Sub-Total-32.0 110.0 131.9 133.3 128.4 535.6

Transfers for Loan 20.0 25.0 30.0 35.0 40.0 150.0

Total 52.0 135.0 161.9 168.3 168.4 685.6

Grand Total 62I 15 &2 17 .4 183.2 180n7 758.6

1/ Ministry of Public Works, Bs. 0.4 millionCorLporaclonuL Tde Los A1e_ Bs. 0l.4 mllio

o/Ministry of Public Wvork-s

3/ CONAHOTU

SOURCE: Direccion de Turismo

Table 1 .7: EXPENDITURE ON TOURISM

(Mission's projection)

(in Bs. million)

1970 1971 1972 1973 1974 Total

Current Exp.

(CONAHOT-U)Promotion 2.0 3.0 4.0 5.0 6.o 20).0Technical Assistance 1.0 1.0 1.0 1.0 1.0 5.0Training 2.0 2.0 2.0 2.0 2.0 10.0Studies 3.0 3.0 3.0 3.0 3.0 15.0Admin. Exp. & Others 1.5 2.0 2.5 2.5 2.5 11.0

Total: 9.5 11.0 12.5 13.5 1T..5 61.0

Capital Exp.

(MOP)Airports 14.3 52.8 84.2 104.1 100.6 356.0Seaports - 1.2 1.6 0.5 - :3.3Roads - - 32.8 37.2 32.6 102.6Sanitation - - 19.8 22.2 22.6 64.6Electrification - _ 13.0 13. 13.0 39-

Sub-Total: 14.3 54.0 151.4t 177.0 168.8 56-55(CONAHOTU)Renovation of Hotels 4.0 5.0 6.0 6.0 - 21.0Other ImDrovement 1.0 3.0 3.0 3.0 3.0 1:3.0Land Purchase - 6.0 6.0 6.0 18.0

Sub-Total: 5.0 14.0 15.0 15.0 3.0 52.0

Total Fixed Investment 19.3 68.o 166.4 192.0 171.8 617-5

(CVF)Loans 5.0 8.2 22.5 21.0 23.5 80.2

Total Capital Expend- 24.3 76.2 188.9 213.0 195.3 697.7itures

GRAND TOTAL: 33.8 87,2 201.4 226.5 209.8 75837

SOURCE: Direccion de Turismo, andMission Estimates

Table 1 .8: DETAILS OF PROJECTED CAPITAL EXPENDITURE

(Mission's Projection)

(in Bs. million)

1970 1971 1972 1973 1974 Total

Capital Exp.

(a) MOPAirports: 14.3 52.8 84.2 104.1 100.6 356.0Maiquetia 14.3 52.6 83.7 103.7 100.0 354.3Higuerote - 0.2 0.2 - - 0.4Canaima - - 0.3 o.4 o.6 1.3

Seaports: - 1.2 1.6 0.5 - 3.3(Terminal)

Margarita - o.6 0.5 - - 1.1Pt. La Cruz - o.6 0.5 -- - 1.Cumana - - 0.6 0.5 - 1.1

Roads: - - 32.8 37.2 32.6 102.6Los Caracas-

Higuerote - - 32.5 32.5 32.6 97.6Los Andes - - 0.3 4.7 - 5.0

Sanitation: - - 19.8 22.2 22.6 64.6Los Caracas-Hieuerote - - 19.q 19.5 19.6 58.6

Litoral Oriental - - 0.3 2.7 3.0 6.o

Electrification - - 13.0 13.0 13.0 39.0

Sub-Total: 14.3 54.o 151.4 177.0 168.8 565.5

(b) CONAHOTU 5.0 flo,0 15.0 l5.0 3.0 52.0

Renovation ofHotels 4J = o 5.o .0 . n - 21 .0

Other Improve-ments 1.0 3.0 3.0 3.0 3.0 13 0

Land Purchase - 6.0 6.0 6.o - 18.0

TOTAL: 19.3 68.0 166.4 192.0 171.8 617.5

SOVULLTJn T : MId -Ossion's EstimatesDireccion de Turismo

1!TabLe 1.9: FOREIGN EXCHANGE COMPONENTS

(In Bs. Million)

1970 1971 1972 1973 197h TOTAL

A. Airnort

Tnvestment Cost 1). ? r nA R1 R7 103,7 100o-n 1 3,-

Foreign iTc.hnge COmponent (317) 19- 'Ai -n 3R) 37.0 111 -9

B. Road (Los Caracas-Higuerote)

Investment Cost 32.8 37.2 2.6 102.6

Foreign Exchange Component (40%) - _ 1.L 1L.9 1.0 41 .L0

C. Sanritation (Los Tc i r

Irnves+men+ Cost - -I9C. 02) '2 nn.

Fore gn .Mo%chL415e. 'v' -2.2. ...... ,...... pn+ 1)_= ±. .L .> .

D. Electrification (Los Caracas-Higuerote)

Investment Cost - - 1 vz 13 & 1L- 0 .0

Foreign Exchange Component (70%) _ _ 9.1 9.1 91 2 7

LI mnArrT A T" . I V±.JLJ i

T t.Mos4- 1). 2 & A -IIC n 1.7 Z,O , '~Investm,Uent C Uo UL -- *J .'-t i .) i([U.i -L LUO e _____

Foreign Excha-nge Component c.3 '19 56.r 6 62.5 209.2

1/L Utb Vi UlEs timatULdLI,t: ofUtefriVLgn1U U ± cU C; Va6U ULs the prevvious Bank

projects in infrastructure in Venezuela. For sanitation, the ratio offoreign exchange components is based on previous projection by IN0S (Vtnezue1anSanitation Institutes).

SOURCE: Direccion de Turismo, and'ri'ss'ion Est-bliates.

Tabhle 1.10: ESTIMATED CREDIT PROGRAM BY CVF (1970-197h)

Total Loan v/

Investment ApplicationsCost 1970 1971 1972 1973 197T TOTAL

Estimated Lending ProgramHoliday Inn(CaracasT 5h,0 22.5 - - 5.0 7.5 10.0 22.5

Melin (ar.q 0 27-0 0 - q-n 11-0 11- 0 27.0

MPelia (LT. Gntral) 31.5 15=7 - 5-7 10-0 - - 15 7

Suh Tota,l 1i 'in2

2/Others I n 15 n 9-0 2.5 2-); 2-E 2-5 lq-n

Total 1h5.5 80.2 5.0 8.2 229 21.0 23 5 80.2

Esti+matedP Sozrrc-e of Vinnnnce

Gentral rI rn,-n mannt 5.0 5.0 5.0 5.0 5.0 25.03/

Foreign Borroidng a - 13.2 13.0 13.0 39.2

CVF nOwrn R oznr 4 - 3.2 14.3 3.0 5.5 16.0

5.0 8.2 22.5 21.0 23.5 80.2

1/ 50% of the total investment cost of the hotels is assumed to beULthUeUU capiatl. hLe UdUet capiUlL i9 texpeted Uo be 1,,l,nanceuthrough CVF.

2/ Provision of credit for other hotels and related facilities fornatUional tUr-iM iS CUntemplauteu.

3/ The amount of credit from foreign resources is estimated at 30% ofthe total hotel investment cost.

4/ The balance between the amounts from the Central Govt. and foreignresources and the total credit to be expected is assumed to be financedfrom CVF's own earning.

SOURCE: CavendesNvlia Gro-upCVFi ssion Estimates

Table 1.121 COMPARISON OF GOVERNMENT AND MISSION PROJECTION

(in Bs. million)

(' rm,rpnme nt M, isienn DifferenCe

Current Exoenditures

(GONAHOTU)Promotion 30.0 20.0 (-) 10.0Teehnica,,l Aqsistance 100 . ( )5 oTraining 4.5 10.0 (+) 5.5

Admin. Exp. & Others 20.7 11.0 (-) 9.7

Total 73-C) 61.0 (-) 12.0

1- MMAUMT-OI

Renovation of Hotels 21.0 21.0Othler TIm rovemen 13. 1 _

Land Purchase 18.0 (+) 18.O

Sub-Total 34.0 52.0 (+) 18.0

2. MOPAirports ~ ~ ~ ~ .0 40. 360 (- 64.2o

Seaports 24.0 3.3 (-) 20.7Roads 35.0 102.6 (i) 67.6Sanitation 22.4 64.6 (+) 42.2Tl- ec'r.Lc:Lt. -. 0 (+ *9.u

SuD-Tnt.ai 50i6 5. (+) 63-3. CVF

Loans 150.0 80.2 -) 97 .

TotlaL 06>0 on(.6 97} l.l

Table 2.1: VENEZUJEIA: ACCOM.MDATTIOSN BY REGION

Number of Number of Total-eEprion lIote:Ls Rooms Pension hRooms Accomnodations Rooms

Distrito Federal(Metropolitan Area) 214 6,833 282 5,530 4L96 12,363

Anzoategui 29 678 39 47L 68 1,149Apure 7 137 -- 7 137Aragua 27 650 44 538 71 1,188

Barinas 3 121 22 223 25 344Bolivar 46 905 29 398 75 1,303Carabobo 25 683 63 872 88 1,555

Cojedes 2 44 4 46 6 90Falcon 15 364 9 1:I1 24 475Guarico 17 320 11 1L4 28 434

Lara 22 668 36 494; 58 1,162MeriLda 38 831 21 225 59 1,056Miranda 17 243 11 141 28 384

Monagas 12 277 20 236 32 513Nueva Esparta 17 571 14 154 31 725Portuguessa 1L 253 20 201 31 454

Sucre 10 472 15 195 33 667Tachira 22 481 53 510 75 391Tru jil Lo 23 517 49 628 72 1,145Yaracuy 4 83 19 211 23 294

Zulia 42 1,173 16 212 58 1,385T. Delta Amacuro 2 19 -- -- 2 19T. Amzonas -- -- -- --

.__ ___ __ ___ __ -- _ _,83

TOTAkIS _ 613_ 1 6,323 777 11,510 _ 390 27,833

SOURCE: Direccion de Turis:mo

Table :2.2: DOI4ESTIC TRAFFIC STATISTICS

1. Domestic Air lraffic (1967)

a. Distance Traveled - Kilometers 17,599,628

b. Length of Flight - Hours 59.997

c. Number of Passengers 876.881

2. Registiration of New Cars

a. Arnual Average (1964-1967) 26,614

3. Transit of Vehicles (196c)

a. Hi ghwav Caracas - La Guai ra 7.102.519

b= Highway Caracas - Valeneia 8116;537

Ca y4tiae - ma Lago de Maracaibo 2,353,239

SOURCE:: Venezuela Anuario Estadistico (1966-1967)Direccion de Turismoo Deel r.Direccion de Turismo

Table 2.3: SEASONAL PATTERNS OF FOREIGN TOURISM

('000 ARRIVALS)

Average~~C~Q flf~~~n47 -I CeLfVl

.L.7u -±70k ±L70-7 kyL7k)(-.L7U7) )

Jan. 10.5 13.1 14.8 12.8 13.8

Feb. 6.7 6.9 6.6 6.7 7.3

Mar. 7.1 7.3 10.9 8.4 9.1

Apr. 6.2 7.9 9.9 6.0 8.0

May 4.7 7.2 6.8 6.2 6.8

June 5.9 7.1 8.0 7.3 7.9

July 8.3 9.8 11.6 9.9 10.7

Aug. 6.2 9.4 11.1 8.9 9.6

Sept. 5.6 6.)4 5.4 5.8 6.3

Oct. 5.4 8.2 9.4 7.7 8.3

Nov. 6.7 6.6 8.4 7.2 7.8

Dec. 2.8 3.5 4.3 3.5 3.8

TOTAL: 76.1 93.4 108.2 82.4 100.0

SOURCE: Direccion de Turismo

Table 2.4: FOREIGN VISITORS' TRAFFIC 1962-1969

('000 Arrivals)

1/ TransientYear Tourists Excursionists Visitors

1962 26.7 n.a. n.a.

1963 30.2 30.1 25.8

1964 41.2 29.9 27.0

1965 54.2 30.2 29.2

1966 70.8 n.a. n.a.

1967 76.3 4o.1 28.2

1968 93.5 65.1 25.7

1969 108.2 74.4 29.4

1/ Defined as visitors staying in the country for lesst ha n 94 h1+, -s,including crietralffic.

2/ Defined as visitors staying in the country for lessthan l8 hours wi4 h anotber-"tr as their destinatio-.

Source: Direccion de Turismo

Table 2.5: FOREIGN CURRENCY RBCEIPTS 1962-1969

(U.S.$ million)

Tourists Excursionists Transients TOTAL

(a) Receipts as from Central Bank's Data

1/1962 2.14 n.a. n.a. n.a.

/i5 5/1963 2.7- o.6- 0.57 3.8

2/ 6/ 6/1964 4.9 O.8 0.7 6.4

3/ 7/ 9/1965 17.3 1.3 2.3- 20.9

311966 22.7- n.a. n.a. n.a.

4/ 8/ 8/1967 29.8 1.6 1.1 32.5

4/ 8/ 8/1968 36.5- 2.6 1.0 40.1

1969 42.2 3.0 1.2 46.4

(b) Revised

1962 10.1, n.a. n.a. n.a.

1963 11.8 1.2 1.0 14.0

1964 16.1 1.1 1.1 18.3

1965 21.1 1.2 1.2 23.5

1966 27.6 n.a. n.a. n.a.

1967 29.8 1.6 1.1 32.5

1968 36.5 2.6 1.0 40.1

1969 42.2 3.0 1.2 46.4

1/ Number of tourists by 3 days; result thereof by $30.Number of tourists by 3 days; result thereof by $40.

3/ Number of tourists by 8 days; result thereof by $40.

4/ Number of tourists by 13 days; result thereof by $40.7/ Number of excursionists and transients by 1 day; result thereof by $20.6/ Number of excursionists and transients by 1 day; result thereof by $25.7/ Number of excursionists by 1 day ;result thereof by $40.7/ Number of excursionists and transients by 1 day; result thereof by $40.9/ Number of transients by 2 days; result thereof by $40.T0/ Number of tourists by 13 days; the result thereof by $30.

SOURCE: Banco CnA_+_., Equeste T1r1ttca No- 9annd Misq.inn Rst.imates

Table 2.6: CCMPAITSOIN OF CLI[ATE CONDITIONS BETWEEN VEN:ZUELA ANI)SOME; SEIECTED CARIBIEAN COUNTRIES

Page 1Precipitation (inc:hes)'

Jan. Feb. Mar. Ar May. Jun. Jul.. JLg. Sept. Oct. Nov. Dec. Tot L

MAIQUETIA (Venezuela)

Av. Rain Fall 2.9 4.3 1.2 0.6 1.3, 2.8 1.1 1.3 2.5 2.5 2.6 1.3 24.4

No. of Days with0.01 in. or more 10 7 4 2 8 11 9 8 1CI 8 5) 7 93

WILLEMSTAD (Curacao)

Av. Rain Fall 2.1 1.0 0.8 1.1 0.8 1.0 1.5 1.2 1.1 4.2 4.4 3.9 23.1

No. of Days witho.O4 in. or more 14 8 7 4 4 7 9 8 6 9 15 16 107

SAN JUAN (Puerto Rico)

Av. Rain Fall 4.3 2.7 2.9 4.1 5.9 5r4 5.7 6.3 6.2 5.6 6.3 5.4 60.8

No. of Day with0.01 in.or more 20 15 15 14 16 17 19 20 18 18 19' 21 212

PORT OF SPAIN (Trinidad)

Av. Rain Fall 2.3 1.2 1.4 1.3 2.8 6.4 7.8 7.6 6.9 5.61 6.5 4.7 54-5

No. of Days with0.01 in. or more 14 8 8 7 10 17 20 21 18 16 17 16 172

SOURCE: Brit,ish Meteorological C)ffice

Table 2.6: TE MPERATUE Di DE3GREES FARENF3IT Page 2

Jan. Feb. Mar. Apr. May JunA ugulY Auj,. Sep. Oct,. Nov. Dec. Annual Average

MAIQUETIA ('Venezuela)Maximum '1950-5 85 86 87 89 91 91 91 92 93 91 90 88 89.5

Minimum 69 70 71 72 73 731 75 7 76 731 73 71 72.6

Average 77 78 79 81 82 82 83 84 85 82 82 8() 81

WILLEMSTAD (Curacac 32yrs)

Maximum 86 87 88 89 90 90 90 92 93 92 90 88 89.6

Minimum 70 71 71 73 74 74 74 71t 74 714 72 7L '72.6

Average 78 7'9 80 81 82 82 82 8:3 8h 83 81 80 82

SAN' JUAN (FPuerto Rico)MaxlmuT 1898-1947 84 85 86 88 90 90 88 89 90 90 88 85 87.8

Minimum 66 66 66 68 70 7L 72 72 72 71 70 68 6S9.3

Average 75 '76 76 '78 80 81 80 81 81 81 79 77 78

P ET OF SPILN (Trinidad)Ma-3iMUM 1862-1939 89 90 91 92 93 91 91 90 92 91 91 90 90.9

Minimum 62 653 63 164 65 66 66 67 67 67 67 65 65.2

Average 76 '77 77 78 78 79 78 79 80 79 78 78 78

Source: EBititsh Fleteorlogical Off'ice

Table 2.6: RELATIVE HIREMDITY (Per cent)Page 3

Jan. Feb. Mar. Apr. May Junie Ju;ly AAU".__ep Oct. Nov. Dec. Annual Average

MAIQ-UEIlA (Venezuela)Max:i-mumn, 74 75 74 76 78 78 77 76 72 7L 71 71 74

Minimum 73 73 72 72 7 1 70 7 70 68 69 68 71 71

Averager 74 74 73 7Lh 75 71h 74 73 70 70 70 71 73

WIILEMSTAD (Curacao) Max. 77 78 76 76 76 76 77 77 77 77 79 78 73

Minimum 69 68 66 67 68 68 68 67 67 70, 72 71 68

Average 73 73 71 72 72 72 73 72 72 74 76 75 73

SAN' JUAN (Puerto Ri.co)Maximum 81 7t9 76 75 76 '76 78 77 78 79 80 81 78

Minimum 75 7'4 74 75 75 7i' 77 77 77 76 76 77 76

Average 78 77 75 75 76 77 78 7'7 78 78 78 79 77

PORT OF SPAIN (Trinidcla)4ax.79 79 79 80 82 84 84 85 85 83 82 83 82

Minimum 71 68 66 67 71 714 73 70 71 7:2 74 76 71

Average 75 74 73 74 77 79 79 78 78 78 78 80 77

Source: British Meteorlogical Office.

Table 2.7t NUMBER OF U.S. VISITORS TO SELECTED DESTINATIONS 1961-1969

1261 -1.9o6 1963 196h 1965 1-966 1967 1968 1969A,

Total

Ab,s. fig. 000," 31,57 I., 1 0990 ""OlA 0 Zfl 0 0K ~ K 0 0f I rrcA;SS. Jig. t'UU_J) .L,Z)h) J., (U( J.ny7U rcwC0 £,U) '-.YI) )[LtV 9,L:u) r4,Inaex (1961-lG0) 100.0 112.1 126.3 139.8 166.5 10M8.8 217.L 21.G6.6 271.i

Eur ~ore~

Abs. ig. ('000) 826 931 1,102 1,250 1,h1O5 1,570 1,P0 1,937 2,35:7Tndex ('196n11o0) 100.0 112.7 133dl 151.3 170.1 190.1 217.9 23i.5 285j

West Indies ;°zCentral AmeriCe

Abs. fig. ( 000) 550 609 631 701 891 1,050 1,220 IL.61 1,681In-,.r (.'.t)1100 100.0 '10.1 11L;.7 127.'i 1. lAG C 15f7 0 01 , S0; I AL A i"L,6

Soot-h AmnericiC-

ADS. Fi-g. (O'C0) 83 35 97 lO 1]27 130 -175 223 241Tndex (1961=100) 100.0 102.1h 116.9 128.9 153.0 156.6 210.8 269.7 290.3,

Other 0verse; s Areas

Abs,5 . T J; g( O 116 1 L 2, 160 162 If0 J.-) 23,0 n/lADS. 1g. I~~~ Ut.))) IjL) 1'C ±!JX) .LUi £UJ C~~r.u £ L)L 4 Ij

Index (1263100) 1)0.0 122.1 3137.9 139.5 172.J 193.? 193.3 227.6 268.1

1/, Estirested on the basis of dat,^ of first 10 months

Sourc{: t1riSrt in O,E.C.D. member countries, OECD

Table 2.8: COMPARISON OF 1969 F'IRST CLASS HOTa RATES IN THE CARIBBEAN

(in U.S. Dollars)

PUETJO RICO (MAY - NO E w

Dorado Hi:Lton Single 28-34 (MAP) 60 - 75 (MAP)Twin 38--44 (MAP) 75 - 85 (MAP)

Inter-Continental- Single 1h--23 18 - 28Ponce Twin 19--28 22 - 32

El San Juan Single 17-26 35 - 50Twin 21-32 ho - 55

JAMAICA (APRIL - DECEMBER)

Sheraton - Kingston Single 17-21 23 - 27Twin 19-21 25 - 27

Jamaica Hilton Sinele 26-36 (MAP) ho - 60 (MAP)Twin 36-46 (MAP_ 50 - 70 (MAP)

Tower Isle Single 26-36 (MAP) 36 - 50 (MAP)Twin 36-42 (MAP) h6 - 5o (MAP)

ARUBA - N.W.I. - (MAY - DECEMBER)

Aruba Caribbean Single 15 - 19 29 - 39Twin 19 - 23 34 - 44

SlSheraton-Aruba Single 14-20 27 - 36

Twin 19-25 33 - 2

CURACAO - N.W.I. - (MAY - DECEMBER)

Curacao Hilton Single 18-20 26 - 28Twin 22-24 32 - 34

Curacao Inter- Single 16-20 26 - 28Continental Twin 21 - 25 32 - 34

TOBAGO & TRINIDAD (APRIL - DECEMBER)Crown Point Single 16 - 19 (MAP) 24 - 27 (MAP)

Twin 27 - 30 (MAP) 42 - 45 (MAP)Trinidad Rilton Single 15-24 19 - 32

T_in 22-30 25 - 38

VENEZUE1. (ALL TVVR DnnMD)

Tamanaco Single 17 19.25 Twin 21.50 - 23.75Caracas Tl:LtIon S.iIg±- 18.25 - 2. WLfr 2 _

Avila Single 14.80 - 19.30 Twin 22.50 - 23.65

I/ (07pt - ideral Ame-rTianPSOURCE: Official Hotel and Resort Guide

Table 2.9: PROJECTION OF FOREIGN VISITORS (1970-1974)

(In 1,000)

7/YEAR TOURISTS EXCURSIONISTS TiANSIENTS

1/ 1/Business Pleasure Total

271 271969 81.1 27.1- 108.2 74 .4 29.4

2/ 3/1970 90.44 42.2 132.6 83.7 29.6

2/ 1hI1971 99.7 65.3- 1h5.0 93.0 29.7

2/ 4/1972 109.0- 48.LJ 157.4 102.3 29.8

2/ q/1973 118.3 73.4 191.7 111.6 29.9

2/ 6/1974 127.6- 84.7 212.3 120.9 30.0

1/ The ratio of business a-n-d fily-motivated tou-rists topleasure-motivated is assumed to be 3 to 1 in 1969.

2/ The projection is based on annual simple growth of 9,300vtli torsir i.. the snme as the rm A arowt.h eoffore4gyn

tourism in the period 1966-1969. The implicit assumptionis made +Inn+ nl ln I6 t.ASUh.e4.LW ratioi. ofbsnes an. -amllr-

motivated tourists to pleasure-motivated was 3 to 1.

3/ The increase in arrivals between 1969 and 1970 is estimated4to V be 1r,-I n T.hi increase--- has been calculated4 by addin

together the "natural" increase in pleasure-motivated tourism(i.e., 3,100, a figure arrived at by a calculation based onsimilar assumptions as those indicated in the previous foot-noulU an -dlU the n-riUIIerC V_ aUU t -LX llcL-. "u"z" % b C.%_ v V ) btLC dard;eassumed to have participated in the "package tour" program byt --e end of ithe -wLinte seson.

- 2 -

3,100 arrivals are added to the 1970 figure to account forthe n.atural increase.. The implicit assumption is made thatthe package tours program will be resumed in the winterseasons of 1970 and 1971.

5/ The increase from 1972 to 1973 is estimated to be 25,000.This figure is calcul]ated by adding together the naturalincrease (3,100) and the increase in arrivals of foreignholidaymalcers (21,9°00) resulting from increased accoin-modation. in particular, this latter figure is arrivedat by assuming that (i) the Melia 300-room hotel willstart operations by t,he beginning of 1973, (ii) its bed-occupancy will be 4S01 as far as international touristsare concerned and (iii) the average length of stay offoreign guests in thi.s hote'L will be four days.

6/ Same assumptions as in the previous footnote except for thebed-occupancy which is estimated to increase to a 55% leve'.

7/ The proJection of excursionists from 1970 to 1974 is basedon an average annual simple growth of 9,300, the same asthe increase between 1968 and 1969.

8/ For the projection of' transients from 1970 to 1979, a veryslight increase reaching to 30,500 transients in 1979 isenvisage d.

Table 2.. 1 0: PROJECTION OF PLEASURE 14OTIVATED FOREIGN TOURIST ARRIVALS IN VENEZUELA (1984)

A S S UJ M P T I O N I A S S IJ M P T I O N II

Annual Number of Nulmber ofCapacity Occupancy Corresponding Corresponding Occupancy Corresponding Nunber of

Rooms Beds ('oco Nights(ooo) Foreign Touirists Nights Coo,ooiLrei Turir sU

Hypothesis A 4,000 80()0 2,920 40 1,168 233,600 50 1,460 282,0)0

Hypothesis B 8,000 16000 5,84.0 o40 2,336 467,200 50 2,920 584,COo

Hypothesi.s C 12,000 24000 8,760 40 3,504 700,000 50 4,380 876,oC)o

Notes

Hypothesis A,, B and C evisage different increases in accommodation facilities in the area Los Caracas-Higuerote byr 1984, i.e., 10 years after the Los CaraceLs-HiguerDte infrELstructural progralm is completted.In particular, Hypothesis A projects an increase of 4,000 rooms, Hyrpothesis B of 8,000 and Hypothesis Cof 12,000.

As for the tourist market response, two assumptions (Assumrptio]n I and Assumiption II) are made for eachof the abovementioned Hypotheses. Assumption I envisaLges a level of occupan,y by foreign visitors of40,5 and Assumption II, on thie other hand, predicts an increase of o0%. In all cases the inrmlicitassumption Ls made that the average length of stay of foreign visitors in t,he Los Caracas-Higuerotearea would be 5 days.

Table 2.11: PROJECTION OF EXC'SuS-IONIST AND T RANSImT TRF FIC - VENEZtUIL(1975- 1984)

(in I000)

1/ 2/Year Excursionists Transients TOTAL

1975 130.2 30.1 160.3

1976 139.5 30.2 169.7

1977 1J48.8 30.3 179.1

1978 158.1 30.4 188.5

1979 167.4 30.5 197.9

1980 176.7 30.6 207.3

1981 186.0 30.7 216.7

1982 195.3 30.8 226.1L

1983 ;'0h).6 30.9 235.5

198h 213.9 40.0 253. 9

V/ Projected on the basis of an annual linear growth of3, 300, i.e. the same inerease as between 1968 and 1969.

9/lnnulallyr lncreased-qizi by.- an estz.imatedl 100 a-r-rlvals- basec!l

on past trends.

Table 2.12: PROJECTION OF TOTAL FOREIGN TOURIST ARRIVALS IN 1984

in ' 000

1/1. Business and Family Motivated 220.6

2/PLEASUREHypothesis A.

2. Assumption I 318.3

3. Assumption II 376.7

Hypothesis B.

4. Assumption I. 551.9

5. Assumption II. 668.7

Hypothis C.

6. Assumption I 785.5

7. Assumption II 960.7

3/TOTAL TOURISMHypothesis A.

8. Assumption I 538.9

9. Assumption II 597.3

Hypothesis B.

10. Assumption I 772.5

11 . Assumption II 889.3

Hvnot.hesis C.

12= Assrmmpt1on T 1 -on1nA

13. Assumnption II 1,T81.3

1/ Based on extrapolation of the trend shown by foreign tourism developmentrnrinrg the period l965-69, i.e. an nnnunl 1near incrpase of QAOnn arrr+IA

2/ Derived from Table 2.10._ q1, of bus4ness & 1-1-Y-U1oulvated visitors and pleasure motivated.

Table 2.13: PRnujCTION OF TOURIST FOREIGN CUuRLNRCY ItEUVr1L IN i984

lj ~Uqt n41'1io

1. Business and Family Motivated 86.0

2/Pleasure Motivated

2. Hypothesis A - Assumption I 76.4

3. Hypothesis A - Assumption II 90.4

4. Hypothesis B - Assumption i 132.5

5. iHypothesis B - Assumption !I: 160.5

6. Hypothesis C - Assumption I 188.5

7. Hypothesis C - Assumption II 230.6

8. Receipts from Ebccursionist andTransients3/ 7.6

Tota:L Receipls

9. Sum of lines 1,2 and 8 above 170.0

10. Sum of lines 1,3 and 8 above 184.o

11. Sum of Lines 1,4 and 8 above 226.1

12. Sum of lines 1,5 and 8 above 254.1

13. Sum of lines 1,6 and 8 above 282.1

14. Sum of lines 1, 7 and 8 above 324.2

1/ Figures in line 1 of Table 2.12, multiplied by 13 (est-imated average length of stay) and the products thereof multipliedby $30 (estimated average daily expenditure).

2/ Figures in lines 2,3,4,5,6 and 7 in Table 2.12 multipliedby 8 (estimated average length of stay) & the products thereof multi-plied by $30 (estimated average daily expenditure)

3/ 1984 figure of total excursionists and transient in Table 2.11multiplied by 1 (estimated average length of stay for excursionistand transient visitors) and the product thereof multiplied by $30.(estimated daily expenditure).