Latin America

Latin Trade, August, 1998 by Claire Poole

Creditors have also given the green light to debt-laden tourism giant Situr to begin selling off some of its 29 hotels.

Polishing Peru. The breath-taking Inca ruins of Machu Picchu are both a blessing and a curse for Peru's still fledgling tourist industry.

Being so universally famous, they require little advertising to draw crowds. Yet they blind the visitor to Peru's other, less spectacular attractions. As numbers of tourists rise, the transportation headache involved in getting them to the remote mountain-top site, perched above a deep canyon with no road access, makes visiting Machu Picchu a more exhausting and less inspirational trip every year.

Fortunately, initiatives to free up the Machu Picchu bottleneck are belatedly under way. Privatizations of transport infrastructure are proceeding. Four consortia are expected to bid for construction of a cable car to whisk train travelers from the valley track to the heights of Machu Picchu in speed and comfort. State railway company Enafer, which runs the improved but still inadequate tourist train from the city of Cuzco to the ruins, is itself up for transfer this year to a private sector operator.

All the hotels belonging to Peru's former state chain Enturperu have also been sold--or occasionally granted in concession--to private sector operators, bringing some welcome upgrading and improved service. Hotel Valle Sagrado de los Inkas in Cuzco. for example, was acquired by British investors and is being managed by Swiss and Americans.

Indeed, foreign hotel operators seem to have discovered Peru's potential. Lima's best hotel, the Oro Verde, has just been purchased by Swisshotels, a division of Swiss airline Swissair. Hilton and other chains like Marriott (USA) and Inter-Continental (UK) are building five-star hotels in Lima with local partners. while Holiday Inn (USA) has bought a hotel in Lima and one in Cuzco.

Although conditions for the tourism sector appears to be improving, hoteliers and tour operators still complain vociferously that the government is neither doing the job of promoting or planning a modern tourism industry for Peru nor is it providing sufficient encouragement to private businessmen to do the job.

"The industry is in chaos." says Eduardo Arrarte, president and founder of Lima Tours. Peru's premier tourist agency. "There are far too many organizations and no communication between them. Despite hundreds of expensive studies of the sector, there's not one person in Peru I'd call an expert on tourism."

According to trade, industry and housing minister Gustavo Caillaux, under whose super-ministry tourism falls, the government's objective is to double the contribution Peru's tourism industry makes every five years to its overall economy. That means growth of around 15% a year.

Government officials used to target how many numbers of visitors visited Peru. But in the past, they've proved to be overly optimistic. Last year, official figures show foreign arrivals amounted to 700,000, up 10% over 1996 but 50,000 short of the government's goal. "Real" tourists account for more than one-third of that figure; the remainder are businessmen or foreign-based Peruvians returning home.