Oil blessing a ‘curse’ for Venezuela tourism

Caracas, Venezuela – Despite international headlines focusing on political divisions, inflation and crime, Mary Lamas thinks Venezuela is a great place for vacation, as it boasts a warm climate, Amazonian jungle, large national parks, golden beaches and the world’s highest waterfall.    

“I would describe Venezuela as being unparalleled in terms of its physical beauty,” Lamas, director of Cosmopolitan Tours, told Al Jazeera. “We have pretty much every type of climate in one country. But a mix of bad planning and the curse of black gold mean we take tourism for granted.”

Holder of the world’s largest oil reserves, Venezuela received more than 780,000 international visitors last year, according to tourism expert Fernando Cifuentes. That’s a 25 percent jump over 2011, he said.

Most recent growth came from emerging markets, including Brazil, Argentina and China, which bodes well for the future, as Europe remains mired in the economic doldrums.

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“Venezuela first focused on Margarita Island, where a duty-free area was created, and other beaches as poles for tourism development,” Cifuentes, a professor at the University College of Caracas, told Al Jazeera. “Oil activity is no doubt the first industry in the country; it accounts for 90 percent [of] income, but the government has created new institutions to promote tourism.”

In 2005, the socialist government created a ministry for tourism, upgrading the department’s status from a public corporation. Although the number of international arrivals has risen significantly, Venezuela still lags far behind its neighbours. For instance, Colombia – synonymous with drug trafficking in the minds of some – still receives more than two  million tourists annually.
 
Cuban model

Cuba, Venezuela’s communist ally, hosted more than 2.5 million visitors in 2012 – despite US travel restrictions.

More than a million Canadians and hundreds of thousands of Europeans visit the island each year, often through holiday packages including airfare and all-inclusive beach hotels. Income from tourism has been an economic lifeline for the government since the fall of the Soviet Union, formerly its main trading partner.

“Cuba is far better than Venezuela in terms of safety,” Cifuentes said. Venezuela recorded more than 19,000 murders last year according to the Venezuelan Observatory on Violence, a watchdog group, making it the third-most-dangerous country in the western hemisphere. Cuba, in contrast, is extremely safe.

“As Cuba doesn’t have oil, they have to focus more attention on tourism as a source of income,” he said. “We depend more on oil, so the government gives the oil industry more attention. It’s a vicious circle and a reality for all [oil-dependent] governments, not just this one.”

Politicised vacations

Debates about tourism and moving the country away from oil dependence are nothing new. Many observers believe the socialist government first elected in 1998 has given the sector more attention than its predecessors. “We have been trying to diversify the economy to tourism, along with agriculture, to get away from this oil-based mindset,” an official from Venezuela’s tourism ministry told Al Jazeera.

Venezuelan race car drivers have been enlisted to support the country’s brand internationally, and the state is helping to train small hotel operators to provide better service, the official said on condition of anonymity, as she wasn’t authorised to speak to the media.

Interest in the country’s “Bolivarian revolution” has also drawn left-leaning foreigners who want to learn more about Venezuela’s social programmes. Global Exchange, a US-based organisation, hosts “reality tours” geared towards activists, but the market for political tourism isn’t particularly large.

Regular travellers are often concerned about the country’s political divide. A recent presidential election saw the socialist government of acting president Nicolas Maduro returned to power with just over 50 percent support, a margin of fewer than 300,000 votes over opposition challenger Henrique Capriles.

Opposition supporters allege the vote was unfair and have been protesting in the streets, sometimes clashing with police and government backers.

Videos of students battling riot police aren’t the images tourist operators are hoping to project internationally. “We can’t run from our problems,” the tourism department official said. “But saying tourists won’t come here because of politics is like saying they won’t go to Mexico or Colombia because of drug trafficking.”

Currency concerns

Politics aside, the country’s economic problems aren’t helping the tourist industry. Inflation is running above 15 percent. Venezuela’s controlled currency, the bolivar, officially trades at a rate of 6.3 to the US dollar. The black market exchange rate, however, is 24:1. This causes unique problems for foreign visitors.
 
A search for hotel rooms on one popular travel website shows four- and five-star hotel rooms in Caracas renting for between $250-500 per night, double what customers would pay for similar accommodation in Mexico City or Bogota.
 

The Intercontinental in Caracas, for example, charges $450 a night for a dowdy room, and most of the facilities haven’t been upgraded since the 1970s.
 
Savvy travellers can get bargains by trading their currency on the black market and paying for meals and accommodation with bolivars in cash, but regular tourists usually don’t like the hassle of having to negotiate with shady moneychangers.
The government expropriated the Caracas Hilton a few years ago and many companies are wary about investing in new properties. 
 
“Our tourist infrastructure has not changed or grown since 1998 as much as it should have,” Lamas, the tour operator, said. “The most serious trouble we have is a lack of investment.” Critics blame government policies for stifling investment and mismanaging the economy.
 
Domestic travel
 
Currency concerns and the difficulties Venezuelans face in getting dollars to travel abroad have led hotel operators and airlines to focus more on the domestic market.
 
“National tourism has increased, especially in high season,” Cifuentes said, citing government programmes to make domestic travel more attractive.
 
Internationally, travel and tourism accounts for 9.3 percent of global GDP, according to the World Travel and Tourism Council. The sector is forecast to expand 3.1 percent in 2013 from $2.1tn in 2012. 
 
“Tourism [in Venezuela] accounts for almost nothing in the national GDP, as oil is responsible for bringing all the money home,” Cifuentes, the professor, said.

Yet the government spokeswoman believes Venezuela has “great tourism potential”, boasting “the world’s largest cable car”, picturesque beaches and great appeal among emerging markets.
 
Compared with the world’s other oil-dependent countries, a long-weekend on Margarita Island’s beaches probably sounds better to many travellers than a vacation in Saudi Arabia, Nigeria, Iran, Russia or Kuwait.

Follow Chris Arsenault on Twitter: @AJEchris