Political Crisis Takes S/500 Million a Week From Tourism (La República [Spanish] - 12/18/2022)

Political crisis snatches S/500 million a week from tourism

Uncertainty. The cancellation of flights and activities due to social upheaval may cause the sector to lose up to US $ 100 million by January 2023. Small businesses are the hardest hit.

Demonstrations calling for the dissolution of Congress and new elections continue in several regions of Peru. In this bleak panorama due to the death of 20 compatriots after the confrontations and repression of the authorities, one of the most affected sectors is tourism, which had been recovering after falling 79.5% in the reception of foreigners and 69% in the flow of local travelers after the first year of the pandemic.

A few days ago, Julio Velarde, president of the Central Reserve Bank of Peru (BCRP), indicated that for the second half of December US $ 40,000 million will be lost and, by January of next year, US $ 100 million for the cancellations already made in the tourist activity.

Here the suspension of commercial flights in the southern regions are considered, as well as the blocking of roads; although from the Ministry of Transport and Communications (MTC) they foresee that air traffic will be "progressively restored" and that the roads will continue to be cleared.

Massive Cancellations

Up to 80% of reservations for hotels and restaurants have been canceled, La Republica previously reported. This exacerbates the situation considering that the end of the year season has a strong demand.

Carlos Loayza, general manager of Canatur, explains that in 2019 the tourism sector contributed S / 48,000 million to the Peruvian economy, but this year it is expected to raise only 50% of this sum.

"We have an injection to the economy for the tourism sector of S / 2,000 million per month (2022); if we take that to weeks, we have S/500 million. That is the value at risk of losses," he told this newspaper.

For his part, Sergio Rivas, vice president of Ahora Perú, details that for these dates 30% less income was calculated compared to the numbers prior to the coronavirus era, but the payment of the gratuity could have encouraged people's travel decision. However, everything was frozen by the high conflict of these days. "Before there was up to 70% to 75% occupancy in the hotel sector. This year, the estimate was 40%. That will go down to 20% due to cancellations," said Tibisay Monsalve, president of the Women's Association of Tourism Business Executives of Peru (Afeet Peru).