Invest in Nicaragua's tourism industry
Strategically located in the center of the Americas, Nicaragua has sought to promote and develop itself as a tourism destination for almost two decades now. The tourism industry has been one of the country’s most rapidly growing sectors, with a sustained growth that today represents almost six percent of Nicaragua’s gross domestic product.
Nicaragua continues to develop its potential as one of the most attractive destinations for investment in several promising areas. The country has over a decade of economic stability, vast improvements in infrastructure and a favorable business climate. It offers many benefits to investors such as its strategic location, unexplored and attractive natural and cultural resources, competitive labor costs, a solid legal framework and a government that encourages investment in the tourism industry.
The Tourism Industry in Nicaragua
The tourism industry in Nicaragua originated in the mid 19th century, however, it wasn’t until the 1990s that the industry experienced constant growth and became one of the most dynamic economic sectors in Nicaragua, becoming one of the country’s main sources of revenue. Since the year 2006, the tourism industry in Nicaragua has registered a compound annual growth rate of 8.6 percent, which represents the second highest rate in the region. In 2009, when tourist arrivals around the world registered a 4 percent decrease and Central America a 7 percent decrease, Nicaragua was among the few places in the world with positive results, with an 8.6 percent growth. For the first time in 2010, more than one million tourists visited Nicaragua and in 2011 tourist arrivals increased by 4.8 percent compared to 2010, reaching a total of 1,060,031 tourists.Presently, this sector generates US$15.8 million, more than 19 times what it generated in 1991.
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One of the sectors with more business opportunities is that of the hotel industry. In 2011, the room inventory in Nicaragua amounted to more than 10,235 units, distributed mainly in the departments of Managua, Granada, Leon, South Atlantic Autonomous Region (RAAS) and Rivas. Of the total rooms available in the country, approximately 63 percent are classified as hotel establishments. Managua, however, is the only destination that offers five star establishments.The hotel industry has been developing mainly in the country’s capital, where most business tourists visit, and where 46.7 percent of the country’s room concentration is found. Cities such as Granada and León have been differentiated for developing colonial and nature hotel segments because of the cultural richness they possess and the natural beauty of their surroundings. The departments of Rivas and the Caribbean coast, on the other hand, compile most establishments that serve the hotel beach segment.
Considering that only 35 percent of the national room supply offer medium to high category amenities and that frequent travelers are looking for new destinations offering quality services, an opportunity arises for hotel investment projects or mixed-use developments that meet this growing demand in Nicaragua.