Margarita Island, Venezuela
The collapse of oil prices last year didn't help. Neither did a drastic currency devaluation. But Venezuela has managed to find some shelter from the storm through other domestic resources: sunny beaches and low prices. Tourism is becoming a bright spot for Venezuela. Margarita Island, one of Venezuela's most popular vacation spots, is translating its nation's call for increased foreign interest into urban development and business opportunities.
Two typical Margarita Island entrepreneurs are Juan Carlos Guisande, president of Publicidad Condord, a burgeoning multi-interest company, and his brother Eduardo. They are planning a ``food of all nations'' restaurant - a multicultural, fast-food service similar to those found in many cities in the United States.
The Guisandes emigrated from their native Uruguay to Venezuela looking for better business opportunities, and they have found them here in Margarita. In a few years, their businesses have grown from two discos to include an advertising firm and a construction company.
Throughout Venezuela, government subsidies, soft loans, and tax incentives for businesses and construction have encouraged investment. But since ``Margarita has more facilities, more attractions,'' as one tourist officer explains, its businesses have had impressive growth. Condominiums and shops, which investors hope will be further incentives for tourists, are on the rise.
Higher property costs in downtown Margarita also reflect the business boom. ``The developers are crazy buying buildings,'' says a Venezuelan Economic Department officer.
Margarita's beaches may be some of the most beautiful in the Caribbean, but the real draw for foreigners is the bargains. Cab rides run about 15 percent of New York City rates, and a five-star hotel room may cost as little as $40 a night.
Vacations in Venezuela are nothing new for Canadians, one tourist officer says. ``They have been coming here for a long time because it's cheap. But their only interest is going and getting good suntans and good bargains.'' Americans, however, also want to know how and where to invest, she says.
Accordingly, the Central Bank of Venezuela reports that last year almost 430,000 tourists unpacked their swimsuits in Venezuela. This number is 10 percent higher than in 1985 and 35 percent more than in '84.
This year tourists have spent 43 percent more than in 1983, putting nearly $450 million into the Venezuelan economy.
The relative strength of the dollar has also helped. In 1983, Venezuela was one of the most expensive countries in Latin America. Now it is one of the cheapest.
``Until just a few years ago, people went to Miami like they were going to the corner,'' says the younger Guisande. ``But,'' he says with a smile, ``now we are importing people and exporting goods.''
In the 3 years that it has booked vacations in Venezuela, TourDann, a New York-based travel agency, says, the number of tourists has soared. Bookings for this year are 35 percent above 1985.
Falling oil prices, however, have hurt the export picture. Facing a debt crisis, Venezuela depends on oil for 90 percent of its export income. In the last four years, oil prices have dropped from $30 to about $20 a barrel. By 1985, Venezuela had the highest debt per capita of any major Latin American country.
In an effort to encourage tourism and investment, the Venezuelan government has tried to lighten import restrictions and encourage efforts to use domestic resources.
Margarita, which was made a free port in the '70s, now attracts not only overseas travelers, but many tourists from other parts of Venezuela and Latin America.
The government also has a variety of programs to promote the use of domestic resources, such as petrochemicals and aluminum, hoping to diversify the economy.
``Margarita is becoming the hottest spot in Venezuela,'' says a Venezuelan tourist officer. ``There's a sense that there is a lot to be done for the country. There is a lot of business to be done.''