RESTRICTED

Vol. 2

This report was prepared for use within the Bank and its affiliated organizatiohs.

Public Disclosure Authorized They do not accept responsibility for its accuracy or completeness. The report mly not be published nor may it be quoted as representing their views.

UNt~K1NA1IiJNA.L DArNI rOR~J 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 Public Disclosure Authorized

CURRENT ECONOMIC POSITION

AND PROSPECTS

OF

VENEZUELA

(in see volrCnes)r~ Public Disclosure Authorized VOLUME II I IT h Tn I

1 2 6 CWU J %- October 12, 1970 _j C r Public Disclosure Authorized

Central America and Caribbean Department 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 ...... 3 Accommodation ...... - 4 Tourism Generated within ...... 5 Foreign Tourism ...... 6 Foreign Currency Earnings and Foreign Exchange 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 ...... 10 Market Considerations ...... i1 Recommended Strategy ...... 12 Medium-Term Projections (1970-1974) ...... 19 Long-Term Projections (1974-1985) ...... 20 Forecast 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 grasslands and forests of the Cordillera de Merida, (iii) in the Guayana tablelands where rain forests and varied wildlife evoke a genuine tropical atmosphere, and (iv) in metropolitan , which holds cultural interests.

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

3. In the public sector, the Direccion de Turismo, the Corporacion Naclonal de Hotels y Turismo (CONAHOTU) and the Corporacion Venezuela de Fomento (CVF) have been responsible for tourism development. The functions of 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. The CVF's role in tourism has been the provision of credit.

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

5. Various indications show that many Venezuelans travel extensively within their nwn country. The maiorltv of these trins are- however, for strictly business purposes. The scarcity and inappropriateness of the resort tnpe nf hot-el encounrAgpe wAelth4ipr Venezuielans to do their nleasure-travellifn abroad and obliges lower income segments of the population to remain at home for their holidays.

6. In 1969, 108,203 foreign tourists visited Vene7iel2 Of these arrivals, 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 4 _ XChe period 1 loa _r. A1 .Al# lg a o .b Sf .1 e-u_e-A-1-1 t^..._ at LLVU. W LILC JJC LJA U U.VLtJ .- Vl~ a &u _F. _ V.Otfl._~ have been attracted to the country since 1964 when a number of accommodations of interr.ation.al standard weecmpleted on the coast .-andt4ptoir i ia abroad, business and family-motivated visitors still account for the majority of foreign tourists. - ii -

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

8. The uncertain outlook for Venezuela's oil sector has recently drawn the Government's attention to tourism as a possibility for diversifying the country's economy. A first step towards coordinating tourism activities in the 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 framework of 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 tourist potential per se capable of attracting a significant number of overseas tour- ists. Attractions existing in other areas such as Caracas, the range and the Guayana region may have, on the other hand, a complementary role in the development of international pleasure-motivated tourism.

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

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

a. The principle of geographic concentration of Government efforts adopted in the Plan de Turismo draft proposals should be further intensified;

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

C. this development should be attained thrnugh a nrogram of integrated infrastructural work; in order to ensure its maximum economic vlabilitvy this progranm should he franmed within an overall general master plan for the area to be develeped;

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

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

e. the resultant savings should be redirected to the Los Caracas-Higuerote area in order to increase the finan- cial means for the execution of the infrastructural program 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 financial renuirementR involved in the imnlementation of Los Caracas-Higuerote infra- structural program. Part of the required financing may well be sought from foreian lendera: in the context of a aeneral develonment investment and fi- nancing strategy, such borrowing, on appropriate terms, would seem eminently suitable. 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 coast than 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 economic devel opment.

II. RESOURCES

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

a. the mountainous north-western area, including the Cordillera- de Merida with -eaks soaring to over 4,000 meters, the plateau and 4Chn CoM mou.nta 4 ns;

b.. tbe coastal zone f1o.n"ed by 4eth Caribbear. mount= U * LA~ A. LA ~ LiL &LLI L .LIUU~A L%J1 ain range (the highest peak, Mt. Niqueta, rising L. 2,6 Meters), whichl stretchLes parallel to the sea from Valencia to the peninsula of Paria;

c. the llanos region, between the Caribbean range and t'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 and coLUprise half oL'the cour.try's territory.

3.* '.rLJ.LC ClOUUU.LJL LcnionsLn thLie moun tainLous northLlern area vary grea;- ly according to altitudes, with average annual temperatures decreasing and precipitatL.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 anUU L01 IJ . 'Lvet Lthe lrea equatorial latitudes of the coastal llanos lowlands, their climates are tropical, with average annual. temperatures of 21-2- C. RainfallX is lightL a long Lne coast partJicularly in its central section (e.g., 350 mm. in La Guaira), and is 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.~ 0nof. the~ r Z 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 at once a Caribbean country (the length of its Caribbean shoreline being seconud only to that of CuDaJ andu part of thLe Southl Almerican continent. It will 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 tracts from Los Caracas to Higuerote, from Puerto la Cruz to Cumana and some of the Falcon state coastal areas which have beautiful, exotic beaches comparable to the Caribbean's best;

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

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

6. The Venezuelan landscape shows great variety and is in itself an important 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, that he had found "Paradise on Earth" in the newly discovered regions which would subsequently be named Venezuela.

7. The country also offers a number of cultural and recreational attractions, 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, "" located approximately 60 miles from the Capital.

8. Venezuela's infrastructure, including nearly 17,000 kilometers of paved roads, 64 airports (of which 4 are international) and 12 harbors, is one of South America's best and thus offers prospective investors the benefit 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 have been carried out, nor were funds allocated for incentives to private in- vestors. Tourist promotional activities were non-existent before 1964 and scare thereafter.

10. The limited Governmental action in the tourist field has been shared 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. These institutions operated with little coordination.

11. The Direccion de Turismo's functions have consisted of making policies and plans for the development of tourism in Venezuela: preparirLg the budget and investment programs, supervising tourism facilities and their operation, screening new hotel construction proposals and promoting Venezuela abroad.

12. Promotion activities have been carried out primarily by the New York based Officina de Turismo, a Government agent acting under the super- vision of the Direccion General de Turismo. Apart from this agent, the Fondo Comun de Promocion de Venezuela, established in 1965 by representat:ives of leading private industries and the Government, has also been promoting Venezuela abroad, particularly in the U.S. and Canada. Altogether an annual 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 capital of Bs. 90 million, CONAHOTU has been primarily concerned with the develop- ment of the hotel industry. Through the years it acquired the ownership of 12 hotels, including the Humboldt-Sheraton (70 rooms) in Caracas, the Macuto-Sheraton (525 rooms) in the Littoral Central, the Bella Vista (Wes;- tern, 161 rooms) on and the Maracay (Western 157 rooms) in Maracay. CONAHOTU operated its hotels directly until 1966, when it contracted 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 the Bahamas $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 accommodation facilities. This average was down to 1.0 million in the subsequent years 1964-1969.

14. The Corporacion Venezolana de Fomento has provided credit for tourism activities, particularly in the public sector. In fact, it has been 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 an average 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 total amount allocated for Venezuela's overall economic development during that period.

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

16. Detailed information on past public expenditure in the field of tourism 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 whole of Venezuela. Of these 613 are classified as hotels and provide a total of 16-A21 rooms, and 777 classified as pensions nrovide a total of 11;550 rooms. In contrast with the continuing world-wide trend towards larger hnteelQ the average unit size in Venezuela has declined from 21.5 roomg in 1965 to 19.9 rooms in 1969. At present there are 13 hotels above the 100 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. Of thes n.ly ahb,ut a dozen meet the at:ndArrc: renipi l f-be internstinnn1 tourist market. As for the remainder, their lack of modern hotel services a.id comfort renders them unattractive to- a11 tyrupe of tnourists other than small local traders. - 5 -

19. Venezuela's tourist accommodations were clearly planned for business-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 few resort hotels that do exist are for the most part owned by CONAHOTU and managed by foreign chains and are located in the Andes or in the coastal areas. Single room rates at hotels of international standard range from $18 to $28.

20. Information on the utilization of existing accommodation is scarce. According to Horwath and Horwath's 1967 survey 1/ of the 15 top hotels situated in various parts of the country, the room occupancy rate of "commercial" hotels was probably about 74 percent and that of "tourist' hotels approximately 47 percent. CONAHOTU's records indicate that the average room occupancy rate registered by the twelve hotels under its control was 45-50 percent in the last three years. It is important to note that the current low occupancy rate of Venezuelan resort hotels need not necessarily be taken as a negative indication of their prospects for future tourism deve]Lopment. Besides being poorly located, most of them lack the complementary services required by today's tourists, particularly in areas newly opened to tourism. As for metropolitan Caracas, the rate of occupancy of its first-class accommodations dropped to a level of about 60 percent from the level well over 80 percent they had reached in the sixties after the 450 room Caracas Hilton opened last November.

Tourism Generated within Venezuela

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

22. The main tourist-generating area in Venezuela is the Federal District where as much as 20 percent of the entire population and an even higher percentage of the total income produced by the country are concen- trated. The flow of visitors originating in this area already make heavy demands on tourist facilities in the nearby littoral particularly on week- ends and holidays. Other tourist destinations popular among domestic vacationers are the Anides region and Margarita Island. For the most part, Venezuelans take pleasure-motivated trips during 4 specific periods of the year for a total of 90 days; the school vacation period from July to September, 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 average rate of 10 percent per year. The outbound figure was down to 220 thousand in 1969, apparently due to political uncertainties that year.

Foreign Tourism

24. The number of foreign tourists entering Venezuela rose from 21 to 108 thousand over the period 1961-1969! increasing at an average annual rate of 25 percent in the years 1961-1964, 22 percent in the years 1964-1967 and 19 Dercent in the vears 1967-1969. North America and Europe have been and 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 53 Europe 4 19 23 21 South America 5 24 15 14 Other Countries 2 10 13 12

TOTA. 21 100n lnR 1nn

2_ The great mTnAritu of foreign vicitOrs Arri-oe hb air, the primary access to the country being Maiquetia International Airport. A number of tourists from neighboring Colnmbia, however, drive to Venezuemla crossing the border at San Antonio. The average length of stay of foreign visitors was 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 both periods. As far as the mission coulda 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 uestatTuricL -0L. No. 2") have been used for the period 1967-1969.

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

a. The significance of business-motivated tourism in particular is attested to by the fact that the United States, Germany, the Netherlands and the United Kingdom, important to Venezuela as tourist-suppliers, also rank first in terms of trade with, or investments made in the country. - 7 -

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

c. Countries such as Spain and Italy, on the other

hand, whose citizens comprieL.L a large segtneitI OL Venezuela's foreign "colony" (461,000 foreign residents ir.1967)vII, a1r e al8-0 p r omi'r. en;1 t ourist- suppliers. Visiting relatives therefore seem to De an important 1otLVaLJJIg lacLOr lor present foreign tourists.

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

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

a. the continuous expansion of the country"s foreign transactions;

b. the general improvement of economic conditions in 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 :Ln Venezuela. comnares with the 8 days averaae length of stav recorded in Mexico, 5 days in Colombia, 6 days in Paraguay, 6 days in Bermuda and 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 "Encuesta TUriStirsk N. 2" would- in faot; apilpar tindereet-imted in view of the (i) high proportion of business-motivated visitors who usually spend morn than nther vi8itonrs and of (ii) the leavel nf prlces generally prevailing in the tourist hotels. - 8 -

29. Foreign excursionists and transit visitors are also of some importance. The former category of visitors, primarily cruise passengers landing at La Guaira for an 8-hour visit of Caracas, increased from 30,000 in 1963 to 74,000 in 1969, while the latter category rose from 26,000 to 29,000 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. These 1 receipts are arrivd at by tl t4ipy4ing 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 average lengths of stay and average daily expenditures (see para. 25 above) t calculate receipts in different periods. However, since there i8 no evi- a t dence thfat foreign tourism p terns, and thL.us either ofsA v-alue, ch.-.ged over the sixties, the sharp jumps from one period to another shown in the

reep .o c .th a ... C ...... sries ..... d4Jo n appear...... 7'1..c x eLupL.VVLAJL1UML '.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 for

the~ average lenA.gLtLh of stay aLnd zvere dai.Ly expenditures respectively, and

b. assuming that these figures were constant over 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 the

suggesteU revi'LsiLons 'Ls showrL. below: l/

Foreign Visitors Ex i~~2J (1962-1969)IInl nen I (US$ million) By Banco Central Revised 1962 3.8 n.a. 1963 3.8 14.0 1964 6.4 18.3 1965 20.9 23.5 1966 26.0 n.a. 1967 32.5 32.5 1968 40.1 40.1 1969 46.4 46.4

l/ A more detailed analysis of the foreign visitors t expenditure in Venezuela is presented in Table 2.5. - 9 -

33. The missinn estimaten that the direet fnreign AxehanoA cnmnont of international tourism expenditure in Venezuela should be set between 15 and 2s perlrent, Ag a strvev has nevpr hben carried nit, ths4a atimate is based on (i) general economic information about the country and its nattern 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* sector has drawn the! Goverment's attention to tourism as a significant possibiliity for dIvers4Ifyv4In tho romin%r7 s eonomy, or of 4Incm e^,- fore4Ig currency earnings and of new jobs. D)uring the mission's stay, a first step towards Ao-ordi.atir. to-4ism. atiet4-4- inl*thepubl sector was Oal-Len whue;; one official was appointed both president of CONAHOTU and director of the 11"Di-reccion General de Turiosm.o.'' an-oevr oveal _1 tor plan1 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 CLLCJ I. LA LLC-IAC*A VCCC CO&..~VC C LLWt&L t.JAtC L .L 5 tourism, the interest of the private sector in this field has become in- creasin.gly keer AAC.. -L , 1969 a 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.otel in Caracas last November, and plans for two other major hotels are already i advancedLna 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-wich project, will actually comprise two new hotels i being undertaken by the Spanish hotel/tour operator, Melia: one of the Melia

Uis Lhe hotelsV. (a 6'JJromU &aciL.iyLJ ). toLb..LLU b irL,94.0L& Caacs 9 t o L (.0J rooms) would be situated on the littoral, near the existing Macuto-Sheratorn.

36. Late in 1969, several first-class Venezuelan hotels, 3 tour operators 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 of actual figures of passergers transported to Venezuela in December, 1769, January and February, 1970, and of reservations made for March and April, a n i n lev 1 _…t I L. n e it 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 released by VIASA, 80 percent of the tour participants have shown marked preference for the coastal Macuto-Sheraton, which has consequently been operating at almost 100 percent occupancy since last December.

1/ That is, in addition to the number of U.S. residents who would have visited 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 state littoral are probably the only areas in the country which possess a tourist potential per se capable of attracting a significant number of foreign tourists as well as Venezuelans. These areas combine a good climate, sandy beaches, tropical vegetation and clear water, precisely those attractions that are drawing to the Caribbean area about 1/3 of the total overseas tourism generated in the U.S. In Table 2.6, the climatic conditions of Maiquetia, 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 Maiquetia has a similar or even better climate for tourism than any of the other three Caribbean localities. While monthly averages of maximum temperatures are generally lower in Maiquetia than in Willemstad and Port of Spain, and only somewhat higher than San Juan, monthly averages of relatively humidity are lower. Furthermore, in Venezuela's central littoral precipitation appears to be not only scarce but more concentrated in the year; 92 days as against 107, 172, 212 in Willemstad, Port of Spain and San Juan, respect- ively.

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

39. The tropical atmosphere, varied wildlife, and the scenery of the tablelands south of the will appeal to certain specialized segments of the domestic and international tourist market, such as the "safari- motivated", for example. These features, however, are not exclusive to Venezuelan Guayana but can be found as well all over the larger Amazonas region, extending beyond the border with . Furthermore, a large tourist develonment in the Guavana region would, at least in the immediate future, 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 byl 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 that offered by some of the other Latin-American countries such as Mexico, Peru, Boliv4iar4 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-called colonial style, so typical in many Latin-American countries, does not seem to have found frequent expression in Venezuela. The country does boast a number of very fine engineering and architectural works. Some of these. like the layout of the Caracas road-system, the University, the cable to Mount Avila. are known the world over. However, it is doubtful that: these: works, whose significance is more technical than artistic or cultural, could of 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 District itself is the main tourist generating area in the country.

41. It follows that only certain tracts of the littoral are likely to have a stirong anneal for international tourism. The tourist resourceR existing in other areas of the country should be regarded as subsidiary to the 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 a proportion of beach-based foreign tourists to Venezuela.

Market Considerations-

42. Geographic, economic and psychological considerations and market frendc ativaP thft I-h:1T-R rather thann Ftrnone nr 5antth Amerira will beP the primary market for any prospective development of vacational tourism to Venezuela. Thoercfnre, it ic helipiepd tha the count-ry,'s prom,tinal efforts shou:ld be directed at penetrating the beach and climate-oriented areas 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 period 1961-1968, North A.merican tourism to the Caribbean has been the faster-roTWing segment of the U.S. market (see Table 2.7). As a result, some of the

CariU bb.eanU is:Lan.As (notLably the Ba"CmasC B L ud --and Puerto Rico) U-v-- Ubee approaching a saturation point with prices going up to a very high level. 4 Congesti onr an,d -- en4ti pri4es semo 4to hnave boen ma in, ,.onnn14le fo the drop in itourist arrivals which, reportedly, was experienced in these islands 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 tourist fCacil ties wl;ch besde beir.g- cUpeitv ir. L L.LJ.LL.L0 WJ1l±ILL, ULJ=0.UCC U=.L&&L, C.=J=fA.UCLLJV= LLL termsI.LI ofc. OLLLULL..LAattractions OLUand stnadards, would also hold appeal in terms of price. However, there is contrasti..g eviden.ce regardi. g Venezuela's actual capabliU .tLi.Les i. thisL

1/ Another possible reason being the recent air-fare reduction on trans-Altlantic routes. - 12 -

respect. A favorable indication is the fact that the pattern of rates for existing accommodations of international standard in Venezuela is lower than that of similar accommodations in a number of Caribbean islands (see Table 2.8). On the other hand, due to the generally high pattern of prices prevailing in the country, Venezuelan accommodation rates compare unfavor- ably with those in the majority of other South American countries. Thus Colombia. a countrv similar to Venezuela in zeograDhic Dosition and natural attractions and superior in points of cultural interests, offers first class accommodations at nrices about 30 percent below those of Venezuela. However. from a broader viewpoint, Colombia's advantages should be weighed against Venezuela'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 in paragraph 23 above, indicate that in 1969 Venezuelans took 220 thousand trips 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, nrohably larger, has not yet been satisfied. Many middle-class Venezuelans cannot affovd the high rost of international travel, and cannot find sititable accommodation at home. Venezuelan authorities estimate that there are no leoc than 2.5 million npeonle in the ronuntry who are in an income hracket that would allow domestic vacationing. This figure is probably somewhat overestimated. !/ 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 Venezuelan au-thorities ir.dicated that the main lines of a nrosnectiua "Plan tie Tuvrisno" would be:

a. further centralization of Governmental 4 ac +4 .4v4i- 4- t-r-,.r 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-capita iLncome ($1,0V0 approx.) ir Venezuela.

2/ According to a survey made by CO%DIPIdN, in the Caracas metropolitan area alone in 1967 there were about 65,000 families for a total of 350,000 persons, earning an annual income above Bs. 36,000 (US$8,000) a level which can be assumed as the likely "threshold" compatible with the participation of Venezuelans in domestic tourism. - 13 -

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

c. concentration of Government development efforts on snecific areas of Venezuela and sizeable nublic investment programs to provide them with the infrastructure reauired for tourism develonment:

d. institutiton of a system of incentives; including low-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 foreign visitors are now required to comply when entering the country;

f. increase in domestic and international tourism rnrmotionn

a_. 8tanhliahmnt nf trainina ounrses fnr hntel personnel.

47. The further centralization of Governmental action would result from a merger of rnMAOnTU anr. thea Direi4 4 n Nacion.al de Turismo in.to a single entity, to be called "Corporacion Nacional de Turismo" (CNT). The nrew corporation would be responsible for:

a. .^a--ri 4 nating the activities4 of the aIso Ministries involved in the development of tou r nl in f:ast:urctu:es;

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

c. giving preliminary approval to all requests for 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 tourism seems rea'listi6,'c ar.d prisi.g In view4.ofteielsiiyofbsns and family-motivated tourist demand it is unlikely that any official tour- istA. L. pol4cyj9L.LL.A a.LMC.aimeA aat 4isL l. expans4ainJjyieL& wouldA~JfS~7.L~J. yieA s.ubssubstantial Canti.a.l rslt.ares-t.A O - 14 -

50. An initial draft of the forthcoming "Plan de Turismo" proposes a total expenditure of 759 million Bolivares. Of this total outlay, Bs. 536 million (or 71 percent) would be allocated for direct capital investment including an infrastructural program (Bs. 502 million) and improvements to CONAHOTU hotels (Bs. 34 million); Bs. 150 million (or 19 percent) would go to loans, through public credit institutions for hotels and related tourist facilities; 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) Littoral LiLttora'l Cer.;ral Or-iental O;hl'er Los Caracas Los Maiguetia Higuerote1rLaLrC%IULL4 O;herL AULUIs ~,caaUcl VLLter TULa airport 345.3 PI 0.3 64.2 - - 1. 3 - 401r

Seaport Port - 20.7 - - - - 20.7 Terminal - - ±.± 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, McCarthy and 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 concept could be intensified greatly in terms of both execution and financing of the "Plan de Turismo;', particularly during the initial stages. 1/ Despite possible pressures favoring dispersion of Governmental efforts throughout the country, final site selection should be mainly determined by ti) the

1/ The development of a single area of high tourist potential within a given country has proven several times in the past to be the most expedient and economic way of promoting the tourist image of the entire country abroad. - 15 -

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

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

a. The abundance of tourist attractions of the area including a series of long beaches of white sand, shaded by dense coconut groves against the extraordinary scenic background of the Caribbean mountain range along the entire coast; an unusually beautiful sea-lagoon near Higuerote, dotted with hundreds of islands and offering a wide range of opportunities for fishing and water sports;

b. its proximity to metropolitan Caracas, which offers interesting excursions for the international tourist staying at the seaside, and to Maiquetia International Airport, the main point of entry to the country; and

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

The implementation of a program of tourist development in the area Los Caracas-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 of the general development of the country.

54. Isla Margarita, for which the draft "Plan de Turismo" proposes an internaticinal airport, a seaport and a costly sanitation system, would not appear to meet the above criteria. Narrow beaches and insufficient coastal vegetation render Margarita less attractive to international tour- ists. The remoteness of this island from the Federal District diminishes its prospects; for domestic tourism development as well.

55. Concentrating official development efforts and outlays does not eliminate the possibility of, and the market's requirements for a diver- sification of tourist attractions. The international beach-motivated vacation demand should be given the possibility of varying or concluding sojourns at the seaside with a one or two day visit to other areas of the country. The! Plan de Turismo draft proposals for the improvement of Canaima Airport, amelioration of the Andes road system and construction of minor infrastructures in various tourist zones of Venezuela (including Isla 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 not only to the infrastructure programs but also to incentive policies. Finan- cial help and tax relief should be scaled, in extent and/or type, to the priorities attached to the various areas. Furthermore, incentive policies should also endeavour to reverse the historical trend of Venezuela accommo- dation towards fragmentation (see para. 17 above) - a goai tnat could be reached by making incentives available only to those hotel projects which appear economically justitiable trom the standpoint of capacity (in addition to other criteria). Concentration of incentives is, however, a principle which can hardly be expected to find practical application tor the Los Caracas - Higuerote area over the next five years, as the preparation of necessary plans and the implementation of infrastructural works will most probably 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 as 21 million Bs. are scheduled for allocation for the renovation of CONAHOTU's hotels, seems to suggest a reduction from Bs. 150 million to 80 million in the expenditure mentioned for hotel-credit in the Plan de Turismo's draft proposals.

58. Out of this reduced amount, Bs. 45 million could be used for fi- nancing the two hotels planned in metropolitan Caracas - an increase in accommodation which appears adequate to meet the likely requirements of both business-motivated tourism and vacational, short-visit traffic in the capital 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 existing Macuto-Sheraton. As for the remaining Bs. 20 million they might be used to provide loans for the building of:

a. 2 to 3 additional medium-sized hotels in the key areas of the Cordillera de Merida where accommodation of an international standard is limited at present.

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

c. commercial and resort accommodation in various areas of the country including Isla Margarita, whenever required by the growth of 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/ 40.0 Training 4.5 Studies 7.8 Administration and other 20.7

Total 73.0

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

61. Hotel personnel training programs should be concentrated in the years from 1970 to 1974 in preparation for rapidly rising specialized personnel requirements in subsequent years. 2/ Studies should also be initiated early if the Los Caracas-Higuerote program is to be implemented in time. With this irn mind, the mission estimates that the actual finan- cial requirements involved in adequate training programs and proper study activities over the next five years may substantially exceed the amounts indicated 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 in administrative costs which may be expected to result from increased Govern- mental activity in the field of tourism. An annual average amount of Bs. 2.2 million over t:he next five years, as against Bs. 4.1 million indicated in the Plan de Turismo draft proposals, would appear more consistent with past expenditures.

1/ Promotion, rather than technical assistance, will be likely to absorb most 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 tourism regulations. 2/ The nossibilitv of establishing at least one regular hotel school by 1973 shoulld be carefully examined. - 18 -

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

64. A comparative outline of the expenditure indicated in the Plan de Turismo draft proposals and of the modifications suggested by the mission is given in the following table:

(in million Bolivares) As from Suggested Plan de Turismo Revision Balance Fixed Investment Infrastructural Program Maiquetia International Airport 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 technical assistance 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 likely still to be 4iradequate foraTOS Caracas- n.a,,rs developer.t progrm. The Venezuelan Government, therefore, may well wish to borrow abroad for fi4 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 set into a genera:L master plan that would specify the location of focal zones or development nuclei within the area under consideration and be inclusive of market anaLysis and a long-term, land-use plan. In order to prevent land speculatLon. furthermore. it would be advisable for the Government to purchase the strategic tracts of the littoral at an early date.

67. Some additional points on strategy for the development of Los Caracas-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 than competitive with foreign tourism; accommodation that would be built nrimarilv for foreian customers can be better utilized throughout the year and more nrofitable if used by domestic visitors in the off- season which coincides with the Venezuelan vacation mon ths (.Tiine-5$en temlher '

b. a tendpnrv to focus interest onnlv on very expensive accommodation should be resisted; in fact, a signi- ficant pronortion of new accommodations in the L.os Caracas-Higuerote coastal area should probably be designed 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-conscious policy appear higly sdvasable in. view of( t ic … l c of vacational tourism resulting from both the continuous process of

%4w^_ tzvx.WSQaX-t .avJ*. v,~;th U4.fl-l b4-a-t.1 0W ne-lre. . z_ .-saugssmentedoin . .. a...importantes t o orof- _^_ family tourism, and (ii) the necessity of co*nteracting the competition of 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 motivated tourism to that of total foreign tourism in the sixties, the trend of the former can be assimilated to that of the latter. - 20 -

69. Consideration should be given to the favourable outlook for increaepd nrnmntinnnl Pnpenditlire and ton UVnPzuea'Q tonurist nnptntial. The increase in the number of holiday makers may then be expected to pairallel increases in aneinmodation in the cnoatal arnea The most plausi- ble assumption is that only the Melia Hotel project will be implemented during the -eriod under con ratinnand that 4t. will nommirenre "oprat4nn at the beginning of 1973. Forecasts based on this primary assumption are presented 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 the longer the period involved. Nevertheless,a pro4ected of foreig tourIsm up 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 2.10 to 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 from intern,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 between 540k 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 toLDe 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'UDeLan area, (15 percent over the period 1961-1968); and

d. growth of foreign tourism experienced by indi- vidual Latin American and Caribbean countries including 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), Dominican Republic (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 the basis of (i) forecasts relating to the increase of foreign visitor arrivals mentioned in previous paragraph and of (ii) a 13-day and $30 average lengthi of 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 these assumptions. Accordinrg to the more pessimistic set, foreign earnings from tourism will havej increased to $170 million by 1984. According to the 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 anci and 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 Region 2.2 Domestic Traffic Statistics

2,-30 Seasn-o- - - Patter?ns-n+.--vc of--# V-ore- - S-. n Toursmcy- - -`. 2.4 Foreign Visitors' Traffic (1962-69) 2.5 Foreg Curency T?-+c-i-- (10A6-Ao) 2.6 Comparison of Climate Conditions Between Venezuela and Sel.ected.Caribbean CountriesO 2.7 Number of U.S. Visitors to Selected Destinations (1961-69) 2.8C*'.A VVJ1J4IQJO.ola .J.ALOo I I --f 1Q697- 1 Fi;rst.L.7- L 1. UL0.Class Hote1JAl LI L lAd.Pat+es Jn.LL i +thel la-;'lean%JL L 'JLU I 2.9 Projection of Foreign Visitors Arrivals (1970-74) 2.10 froP jectn,ior. of P7.easure r.otivadlue 'oreign Tour.Ls I' 'L .L In Venezuela (1984)

£ * II r.UJtCI.~UU2.11 PojecQon 0V1of~cursonistand IA.LUIi1cL~ul dLU ±TLrans en'~±U TraffciI 1 .LU_L ±11 Venezuela (1975-84) 21* 0o TotalJ~CUiUIU d relgn ±uurist Arrivals ian 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 57.6

Transf er lto Conahotu 18.5 Is.6 3.4 - 3.4 Total 30.3 99..6 T11.0 12 .5 17.53 T125 Zi.3

Capittl Expenditure (1958-1969) CVF Fixed Asset lo.6 (.9 Shares 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 52.0 Shares & Loans 26.1 IL.7 - - - - Total ___. __ __ TI1 W.0 7______

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

Source: Direccion de Turismo Corporacion Venezol ana dea Fomento Conahotu Mission'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 11.8 Transfer to Conahotu 5.9 5.9 3.3 3.4 18.5 Total 9.2 O6.3.9 5.Y 30.3 20.3%

Capital Expenditure

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

Conahotu-/- Fixed Asset 1.0 1.0 1.0 1.0 4,0 Others _ _ _ 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 annual expenditure from 1964 to 1969 as to the figures in the Table 2/3.

Source: Direccion de Turismo C.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 6,670.8 P.R. & Advertisement 1,000.0 1,000.0 1,000.0 637.8 7,637.8 N.Y. Office 357.5 323.1 323.1 323.1 1,326.8 Expo in New 'ork 799.2 376.0 - - 1,175.2 Fondo 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 rl uon u tu- w-u WLOJ - - vL V. V , I/.,427u.V Oficina Central 990.0 990.0 500.0 600.0 3,080.0 Teleiaeico (Merida) - - 1,111.0 1,110.0 2,221.0 Hotel Sheraton - - -_-___

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

Source: Direccion de Turismo Conahotu M-n- I I rnTlC f. A T`V`W AT ~'rflT-ITT`rrIT`MT T' C' nIIT Mf\TMrIC. f I,Cr'O- , Zn TabLe 1.4; CVrIU 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 3.6 1959 - 1965 12.3 1960 0.2 1966 21.2 1961 - 1967 61.0 1962 3.5 1968 12.8 1963 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 30 iii. Loans 84.4 62 Total 135.4 lo c) Average Annual Capital Expenditure 1958-1963 1964-1969 1958-1969 Total 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 10.4 L&.7 VU 1a0..J2LJL C.LU 4

Source: C.V.F. 1/ Table 1.5: CAPITAL EXPENDITURES BY CONAHOTU (1955-1969)

(in Bs. million)

______i964~-i969 195S-1969 Total Annual Av. Total Annual Av. Total Annual Av.

Fixed Asset 3/ 553 6.1 6.2 1.0 61.5 .1 QL.fares &CC WULL_U t,- 2o.L 2.9 - - 26.1 1.7 Total Gross Outlay 9.70O 7 1.0 77Z :.

1/ Figures shown in the Balance Sheet

(1955-1969) 1963 1969 Total (% )

Fixed Assets 55.3 6- 61.5 70 Shares 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 the amount invested in shares and loans throughout the operation period (1955-1969).

2/ Fixed Assets: Lne total capital expend tur-e on f',xedu asse'rs including deferred expenses from 1955 to 1969 is 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 wxd credits from 1955 to 1969 is taken from the acc,-,,-OA. L,u.1 'atedI.. a,,I~. gross5~. ~ figures****~~.L sho"A&W-AL.Jfl in~.. 4k2+I-heU2A_ 10°63 Balance Sheet assuming that CONAHOTU has mla'- transacti'ons b'y transferrng the1lo. of investment in shares and credits to the

oI41er AUL"LoI LUL. IbUt LIo theLl 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 - 4.5 Studiesl/ 1.5 2.9k' 1.7 1.4 0.3 7.8 Others3/ 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 99.1 119.1 122.1 420.2 Seaports./ 3.2 5.6 5.5 5.0 4.7 24.o Tourist Roads2/ 5.3 14.7 8.o 7.0 - 35.0 Sanitation_2/ 2.2 10.1 10.1 - - 22.4 Renovation of Hotels3/ 4.0 11.0 6.o - - 21.0 Others3/ 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 million

CorLporaclonuL LosTde 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).0 Technical Assistance 1.0 1.0 1.0 1.0 1.0 5.0 Training 2.0 2.0 2.0 2.0 2.0 10.0 Studies 3.0 3.0 3.0 3.0 3.0 15.0 Admin. 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 84.2 104.1 100.6 356.0 Seaports - 1.2 1.6 0.5 - :3.3 Roads - - 32.8 37.2 32.6 102.6 Sanitation - - 19.8 22.2 22.6 64.6 Electrification - _ 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 - 21.0 Other ImDrovement 1.0 3.0 3.0 3.0 3.0 1:3.0 Land 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 76.2 188.9 213.0 195.3 697.7 itures

GRAND TOTAL: 33.8 87,2 201.4 226.5 209.8 75837

SOURCE: Direccion de Turismo, and Mission Estimates Table 1 .8: DETAILS OF PROJECTED CAPITAL EXPENDITURE

(Mission's Projection)

(in Bs. million)

1970 1971 1972 1973 1974 Total

Capital Exp.

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

Seaports: - 1.2 1.6 0.5 - 3.3 (Terminal) Margarita - o.6 0.5 - - 1.1 Pt. La Cruz - o.6 0.5 -- - 1. Cumana - - 0.6 0.5 - 1.1

Roads: - - 32.8 37.2 32.6 102.6 Los Caracas- Higuerote - - 32.5 32.5 32.6 97.6 Los Andes - - 0.3 4.7 - 5.0

Sanitation: - - 19.8 22.2 22.6 64.6 Los 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 of Hotels 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

SOVULLTJnT : MId-Ossion's Estimates Direccion de Turismo 1! TabLe 1.9: FOREIGN EXCHANGE COMPONENTS

(In Bs. Million)

1970 1971 1972 1973 197h TOTAL

A. Airnort

Tnvestmentr nA Cost 1). ? R1R7 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

1 Foreign Exchange Component (40%) - _ 1.L 1L.9 1.0 4 .L0

C. Sanritation (LosTc i r Irnves+men+ Cost - -I9C. 02) '2 nn.

Fore gn.Mo%chL415e. 'v' -2.2...... ,...... pn+ ±. .L1)_= .> .

D. Electrification (Los Caracas-Higuerote)

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

Foreign Exchange Component (70%) _ _ 9.1 9.1 91 27

LI mnArrTA T " . I V±.JLJ i

T t.Mos4- 1). 2 & A -IICn 1.7 Z,O , '~ Investm,UentUo C 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 ViofUtefriVLgn1U UlEs timatULdLI,t: U cU± C; Va6U ULs the prevvious Bank projects in infrastructure in Venezuela. For sanitation, the ratio of foreign exchange components is based on previous projection by IN0S (Vtnezue1an Sanitation 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 Applications Cost 1970 1971 1972 1973 197T TOTAL Estimated Lending Program Holiday Inn(CaracasT 5h,0 22.5 - - 5.0 7.5 10.0 22.5

Melin (ar.q 0 0 27-0 - 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 25.0 3/ Foreign Borroidnga - 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 be ULthUeUU capiatl. hLe UdUet capiUlL i9 texpeted Uo be 1,,l,nanceu through CVF.

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

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

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

SOURCE: Cavendes Nvlia Gro-up CVF i 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 (-) 10.0 Teehnica,,l Aqsistance 100 . ( )5 o Training 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 21.0 Othler TIm rovemen 13. 1 _ Land Purchase 18.0 (+) 18.O

Sub-Total 34.0 52.0 (+) 18.0 2. MOP

Airports ~ ~ ~ ~ 40..0 360 (- 64.2o Seaports 24.0 3.3 (-) 20.7 Roads 35.0 102.6 (i) 67.6 Sanitation 22.4 64.6 (+) 42.2 Tl-ec'r.Lc:Lt. -. 0 (+*9.u

SuD-Tnt.ai 50i6 5. (+) 63- 3. CVF Loans 150.0 80.2 -) 97 .

TotlaL 06>0on(.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 1,149 7 137 -- 7 137 Aragua 27 650 44 538 71 1,188

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

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

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

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

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

Zulia 42 1,173 16 212 58 1,385 T. 2 19 -- -- 2 19 T. 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 2,353,239

SOURCE:: Venezuela Anuario Estadistico (1966-1967) Direccion de TurismooDeel r. Direccion de Turismo Table 2.3: SEASONAL PATTERNS OF FOREIGN TOURISM

('000 ARRIVALS)

Average flf~~~n47 -I CeLfVl .L.7u -±70k ~~C~Q±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/ Transient Year 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 less t ha n 94 h1+, -s,including crietralffic.

2/ Defined as visitors staying in the country for less than 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 31 1966 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 1 Precipitation (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 with 0.01 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 with o.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 with 0.01 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 with 0.01 in. or more 14 8 8 7 10 17 20 21 18 16 17 16 172

SOURCE: Brit,ish Meteorological C)ffice DE3GREES FARENF3IT Table 2.6: TE MPERATUE Di Page 2

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

MAIQUETIA ('Venezuela) 89.5 Maximum '1950-5 85 86 87 89 91 91 91 92 93 91 90 88 72.6 Minimum 69 70 71 72 73 731 75 7 76 731 73 71 82 8() 81 Average 77 78 79 81 82 82 83 84 85 82

WILLEMSTAD (Curacac 32yrs) 90 88 89.6 Maximum 86 87 88 89 90 90 90 92 93 92 7L '72.6 Minimum 70 71 71 73 74 74 74 71t 74 714 72 80 82 Average 78 7'9 80 81 82 82 82 8:3 8h 83 81

SAN' JUAN (FPuerto Rico) 85 87.8 MaxlmuT 1898-1947 84 85 86 88 90 90 88 89 90 90 88 68 6S9.3 Minimum 66 66 66 68 70 7L 72 72 72 71 70 77 78 Average 75 '76 76 '78 80 81 80 81 81 81 79

P ET OF SPILN (Trinidad) 91 90 90.9 Ma-3iMUM 1862-1939 89 90 91 92 93 91 91 90 92 91 67 65 65.2 Minimum 62 653 63 164 65 66 66 67 67 67 78 78 Average 76 '77 77 78 78 79 78 79 80 79 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

A;SS. Ab,s.Jig.fig. t'UU_J)000," .L,Z)h)31,57 J.,I., 1 (U( J.ny7U0990 rcwC0""OlA £,U)0 Zfl '-.YI)0 0K ~)[LtV K 9,L:u)0 0f r4,I rrc 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 2,35:7 Tndex ('196n11o0) 100.0 112.7 133dl 151.3 170.1 190.1 217.9 23i.5 285j

West Indies ;°z Central AmeriCe Abs. fig. ( 000) 550 609 631 701 891 1,050 1,220 IL.611,681 In-,.r (.'.t)1100 100.0 '10.1 11L;.7 127.'i 1. lAG C 15f7 0 01 I , S0; AL A i"L,6

Soot-h AmnericiC-

ADS. Fi-g. (O'C0) 83 35 97 lO 1]27 130 -175 223 241 Tndex (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 . TJ; g( O 116 1 L2, 160 162 If0J.-) 23,0 n/l ADS. IjL) 1g. I~~~1'C Ut.))) ±!JX) .LUi £UJ C~~r.u £ L)L4 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 - 28 Ponce Twin 19--28 22 - 32

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

JAMAICA (APRIL - DECEMBER)

Sheraton - Kingston Single 17-21 23 - 27 Twin 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 - 39 Twin 19 - 23 34 - 44 Sl Sheraton-Aruba Single 14-20 27 - 36 Twin 19-25 33 - 2

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

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

Curacao Inter- Single 16-20 26 - 28 Continental 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. (ALLTVVR DnnMD) Tamanaco Single 17 19.25 Twin 21.50 - 23.75 Caracas Tl:LtIon S.iIg±- 18.25 - 2. WLfr 2 _ Avila Single 14.80 - 19.30 Twin 22.50 - 23.65

I/ (07pt - ideralAme-rTianP SOURCE: 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 27 1969 81.1 27.1- 108.2 74 .4 29.4 2/ 3/ 1970 90.44 42.2 132.6 83.7 29.6 2/ 1hI 1971 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 to pleasure-motivated is assumed to be 3 to 1 in 1969.

2/ The projection is based on annual simple growth of 9,300 vtli torsir i.. the snme as the rm A arowt.h eoffore4gyn tourism in the period 1966-1969. The implicit assumption

is 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 estimated 4to Vbe 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 on similar assumptions as those indicated in the previous foot-

noulU an -dlUthe n-riUIIerC V_ aUU t -LX llcL-. "u"z" b % C.%_v V ) btLCdard;e assumed to have participated in the "package tour" program by t e end-- of ithe -wLinte seson. - 2 -

3,100 arrivals are added to the 1970 figure to account for the n.atural increase.. The implicit assumption is made that the package tours program will be resumed in the winter seasons 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 natural increase (3,100) and the increase in arrivals of foreign holidaymalcers (21,9°00) resulting from increased accoin- modation. in particular, this latter figure is arrived at by assuming that (i) the Melia 300-room hotel will start operations by t,he beginning of 1973, (ii) its bed- occupancy will be 4S01 as far as international tourists are concerned and (iii) the average length of stay of foreign guests in thi.s hote'L will be four days.

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

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

8/ For the projection of' transients from 1970 to 1979, a very slight increase reaching to 30,500 transients in 1979 is envisage d. Table 2.. 10: 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 of Capacity 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 C of 12,000.

As for the tourist market response, two assumptions (Assumrptio]n I and Assumiption II) are made for each of the abovementioned Hypotheses. Assumption I envisaLges a level of occupan,y by foreign visitors of 40,5 and Assumption II, on thie other hand, predicts an increase of o0%. In all cases the inrmlicit assumption Ls made that the average length of stay of foreign visitors in t,he Los Caracas-Higuerote area 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 of 3,300, 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/ PLEASURE Hypothesis 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 TOURISM Hypothesis 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 development rnrinrg 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 and Transients3/ 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 multiplied by $30 (estimated average daily expenditure). 2/ Figures in lines 2,3,4,5,6 and 7 in Table 2.12 multiplied by 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 2.11 multiplied by 1 (estimated average length of stay for excursionist and transient visitors) and the product thereof multiplied by $30. (estimated daily expenditure).