«In a joint effort, UN Tourism and CAF underscore the vital importance of attracting investment as an engine of tourism growth in El Salvador. The new ‘Tourism Doing Business - Investing in El Salvador’ Guide highlights the country’s competitive advantages, promoting resilient and sustainable tourism development that enriches the economy, celebrates culture and respects the environment.»

Zurab Pololikashvili,
UN Tourism Secretary-General

Introduction

Within the framework of the "Tourism Doing Business" series of reports, UN Tourism has collaborated with the government of El Salvador and the Development Bank of Latin America and the Caribbean (CAF), to create a guide to promote investments in the country's tourism sector. This publication serves as a reference for investors, providing valuable information and guidance on the investment climate in El Salvador, as well as the opportunities that exist in its tourism sector.

In relative terms, Latin America and the Caribbean reached, in 2023, an all-time high attracting 14.5% of total global Foreign Direct Investment (FDI), far exceeding the 9.1% it attracted in 2019, which shows that the region continues to gain positioning as an attractive destination for investments, even in a complex and uncertain environment.

For its part, El Salvador has established itself as an attractive destination for FDI. In 2023, the country attracted USD 730 million in FDI, representing an impressive 344% increase from 2022. This growth continued during the first quarter of 2024, with an increase of 8.8%, compared to the same period of the previous year.

Summary

El Salvador's tourism sector has shown a remarkable recovery. In 2023, the country had the fourth-highest growth in the region in tourist arrivals, which increased by 40.4% compared to 2019. The average daily expenditure of tourists has also grown significantly, going from USD 107.6 in 2019 to USD 153.7 in 2023. These figures underscore the opportunities that El Salvador offers for investment in tourism.

The business climate in El Salvador is favourable thanks to controlled inflation and solid economic growth. Projections indicate above-average growth for the region, along with lower expected inflation. The National Trade Facilitation and Investment Promotion Strategy supports and fosters this favourable environment for investment.

In addition, El Salvador has young and productive talent: 54% of its workforce is under 40 years old, and is notable for its commitment and culture of service. As for the tourism sector, since 2019, overnight stays have grown by 52%, while the number of hotels has increased by only 6%, which has raised occupancy rates and shows the sector’s potential to attract investment.

Investment Opportunities

El Salvador has a substantial portfolio of investment opportunities in tourism development, with projects exceeding USD 7.5 billion in total. These investments include enabling initiatives as well as projects directly related to the tourism sector.

With a growing economy and an expanding tourism sector, El Salvador presents itself as the ideal destination for investment. Advances in security, available incentives and the recent creation of the Trade and Investment Promotion Agency, Invest in El Salvador, reinforce the fact that this is the perfect time to position the country as a world-class tourist destination.

Conclusions

El Salvador has implemented various reforms and policies to improve its investment climate. Favourable conditions, such as an attractive tax regime and a stable macroeconomic environment, have been key to attracting foreign investors.

The combination of low energy costs, a young workforce and tax benefits can become crucial competitive elements to develop a tourism sector aligned with current trends in sustainability and innovation.

Finally, its privileged geographical location in the centre of the Americas, together with the quality of its infrastructures and the fact that it shares a time zone with the central area of the United States, make it a hub for the provision of international commercial services to one of the largest markets in the world. In terms of tourism, this combination of infrastructure and time-zone advantages, coupled with the wide range of tourism attractions that include sun & sand, ecotourism, nature and adventure tourism, position the country as an attractive, competitive destination with a high potential for return for investors.

We invite you to explore this guide and discover the opportunities that this beautiful country offers for investors interested in the tourism sector.