Interview with Jaime Alberto Cabal

National President of the National Federation of Merchants of Colombia

Jaime Alberto Cabal Sanclemente

National President of the National Federation of Merchants of Colombia

Jaime Alberto Cabal Sanclemente, born in the city of Buga, located in the west of the department of Valle del Cauca in Colombia. He represents Colombian personalities who, although born and proud of their roots, made the international leap to train and occupy important positions of responsibility.

Always closely linked to the tourism industry, he was the first Colombian to hold the position of Deputy Secretary-General at the World Tourism Organization (UNWTO) in 2018, after having served as Colombia's ambassador to Austria and Korea, in addition to having held the post of Minister of Economic Development, among other roles.

Industrial engineer graduated from the Universidad Javeriana, with a specialisation at the Universidad de los Andes and the Inalde Business School, and studied economics at Georgetown University in Washington, with a master's degree in Economics from American University.

He currently presides the National Federation of Merchants (FENALCO), where the commitment and development for tourism is perceived in all the activities proposed in this important institution.

Dear Mr. Cabal, after your long experience in the tourism sector, how do you perceive the current development of Colombian tourism?

If we analyse the situation of the sector, we have that between 2002 and 2019 it has been a growing sector, about 6 million travellers entered the country in 2019. In 2020 - 2021 we had, as globally, a critical situation as a result of the pandemic, but in Colombia from the second two-month period of 2021 and the run of 2022 we have had a period of broad recovery.

We have some factors that benefit us, a high dollar price that favours the arrival of international tourists and encourages domestic tourism and better prepared national destinations with better infrastructure, better promotion, especially in traditional destinations.

After the recent political changes in your country, do you think that national tourism policies will follow a similar course or will there be changes in this line of work and in tourism policies?

The current government has announced its peace-oriented tourism strategy and it is essential that there is coherence between discourse and action. Many opportunities are opening up, but a new policy is needed to meet the objective, since the goal of 12 million visitors proposed by the president is to double the current situation.

In this sense and to achieve the objective, it is necessary to develop a strategy to create and strengthen peace destinations (infrastructure, accommodation, services), greater connectivity, sustainability and quality programmes, technical and economic resources and others at government level such as reforms, sectoral policy, interrelation with government sectors and institutions (Fontur, Procolombia, Innpulsa), second-floor banking and tax benefits that promote formalisation.

Since your arrival at Fenalco, what are the main developments you have promoted in relation to tourism?

Fenalco has defended exemptions in the tourism sector, in income tax, the provision of hotel services, ecotourism theme parks and/or agrotourism. The exemptions for hotel services and the 5% VAT on air transport services are in force until 31 December 2022. We have proposed to the government that the dismantling of these exemptions be gradual.

In addition, we have proposed tax benefits for the tourism sector for the construction of destinations in areas with potential for ecotourism and peace tourism. Tax benefits should be concentrated in specific regions of the country to strengthen and build destinations.

It is widely acknowledged that, had it not been for the tax incentives established since the beginning of this century for the hotel sector, today's developments in tourism would not have been achieved.

And in your opinion, what does the national tourism industry offer to the social, economic and cultural development of the country?

Tourism has the characteristic that it impacts the entire value chain, from large hotel chains, small hotels, convention centres, non-conventional venues to artisans, producers of gastronomic products, and it also allows the culture and tradition of a destination to be enhanced. Tourism is a platform that connects them all, brings development to the region, for example, the average expenditure of a meeting traveller is US 422 with an average stay of 3.6 days in the destination, this of course contributes to the economy, to the social and promotes the development of the territories.

And what does your country offer to the international tourist that is different and unique?

Colombia is a country with a great diversity, the traveller can find a cultural and historical offer, a wide gastronomic offer, but above all the warmth of its people. We are a country with 2 coasts, the Pacific where in August visitors can enjoy whale watching and surfing and the Caribbean with islands such as San Andres and Providencia, the city of Santa Marta and the beautiful Cartagena de Indias. We have jungle, valley, mountains, desert, a whole range of tourist attractions, but above all experiences.

You are very knowledgeable about the evolution of national tourism, where is it now, where is it heading, and what should be corrected?

The tourism sector in general has had a very positive 2022. The vast majority of hotel chains and tourism and transport services have shown great resilience and have returned to the demand they had before the pandemic. We are talking about a sector for which the country's GDP contracted by 2.3%, and which today is one of the main drivers of the economic recovery, so the upturn is quite encouraging for the national economy.

However, at the moment there is a major concern for the sector, which is the elimination of tax exemptions proposed by the current Tax Reform being processed in the Congress of the Republic, as it would make several services associated with tourism considerably more expensive and would create an economic disincentive for this sector. A direct consequence would be seen in new accommodation, particularly in regions where the tourist offer is not so well developed, such as several areas of the Pacific. It would hinder the diversification of the tourism offer in these territories and the social and economic development of these destinations.

Add to this the current double-digit inflation and the potential recession next year, and the outlook for the near future is not encouraging.

After the pandemic, your organisation was one of the most active in reactivating the national tourism industry and, specifically, that related to tourism. What stands out as innovative in your proposals at that time?

Fenalco, being multi-sectoral, has among its tourism sector affiliates different actors in the value chain: hotels, travel agencies, restaurants, conference operators, convention centres, audiovisual companies, among others. For this reason, and because the meetings market has been one of the hardest hit and difficult to recover in the short term due to border closures and mobility restrictions that impacted the industry not only at the regional but also at the global level, the union decided to support the MICE industry.

The initial strategy was to focus our actions on domestic markets, from the guild we supported the economic recovery and the holding of face-to-face events, we were the first guild to hold its face-to-face congress in October 2021 in the city of Cartagena, mobilising more than 1000 participants including affiliates, exhibitors, national and international speakers.

The challenges for the MICE meetings industry in the regions are the generation of confidence in the destinations and the adaptation of entrepreneurs to change. Confidence generated for example by Colombia being the first country in the region that in 2020 launched the security seal (Check in certificate) endorsed by the World Tourism Organisation (UNWTO) and the World Travel and Tourism Council (WTTC) and adaptation in the accompaniment that from the unions we provide to entrepreneurs in the industry generating spaces such as the first "International MICE Congress" that Fenalco held in 2021 in a completely virtual format providing tools that would allow them to understand where the industry is going. In 2022, we are committed to face-to-face events in the city of Bogota where, together with local institutions and industry players, we will hold the "II International MICE Congress" in November with a business roundtable component for decision-makers affiliated to Fenalco who organise events in Colombia and internationally.

Do any of these proposals have continuity?

Of course, we will strengthen the Events Industry by giving it continuity and strengthening our version of the MICE Congress and in 2023 we will bring a new proposal with our "1st International Congress of Experiential Tourism", with the support of the UNWTO. We will hold it in the city of Santa Marta in the first quarter of the year and we will invite destinations to participate with their experiential offer, with an innovative component, which is that through a competition and a 10-minute presentation of this offer with the juries that take part in the discussions, the new destination will be chosen to hold the event the following year.

This is a bet that generates value for the regions, since by participating in an event they will be able to take an International Congress to the region, thus boosting the economy and the Tourism Value Chain.

You were Deputy Secretary of the UNWTO. Do you believe that the UNWTO offers countries a common strategy to face the challenges of international tourism?

I believe that the UNWTO provides a very valuable frame of reference for the actions of both governments and businesses around the world. However, the effectiveness of the strategies that are implemented will depend on the added value that each of the organisations make on the baselines provided by the UNWTO.

For example, many countries recognise and promote tourism as the engine of economic growth, seeking to increase the competitiveness and sustainability of related businesses, generating incentives for tourists, among others. However, very few entities are promoting the use of tools and technologies of the fourth industrial revolution, such as big data, internet of things (IoT), blockchain or augmented reality in the sector. Analysts and prestigious organisations such as the IDB have stressed the importance of these tools for tourism, as the future of business involves their use, but even so, there are not many clear policies towards this goal. I believe that this is where the difference lies: in how much added value is effectively applied in tourism in each country.

Do any of these proposals have continuity?

Some still remember you for your positive time at the UNWTO, and knowing this organisation and the current needs of the international industry, what would you not propose or do again?

In my opinion, since this is a multilateral organisation, we should strengthen the implementation of the strategic lines that are dictated by the secretariat, making it more accessible and better known to the most remote and lesser known countries, to give them the opportunity to integrate their tourism offer into the tourist circuits.

And what objectives would you propose?

The main thing is to adapt the tourist offer and products to the needs of today's customers and to anticipate the needs of tomorrow. To do this, I believe it is essential to take advantage of information technologies and the fourth industrial revolution. Once considerable progress has been made in this area, we will be able to think about substituting the sectors that traditionally contribute to economic growth in developing countries, such as hydrocarbons, commodities, etc.

Tourism and commerce are closely related, what programmes are you developing in this strategic relationship?

FENALCO, industries, businesses and other establishments related to tourism in Colombia have been working to promote the concept of "shopping tourism". In essence, the aim is to bring the local commercial offer to tourists, to invite them to become part of the culture and the social and economic dynamics of each destination; in other words, to link tourists to different routes towards the purchase of handicrafts, gastronomic products, etc. Our affiliates are clear about this important segment of the market and seek to match the local tourist conditions in the best way possible.

There is a lot of talk about the digitalisation of the tourism industry, what plans are being developed by FENALCO?

During the Pandemic, at the initiative of Fenalco and inviting Avianca Airlines to participate, we took on the task of making Colombia's destinations and their tourism offerings visible, telling travellers that they were ready to receive them, with a campaign on networks "What you want is Colombia" that connected the desire to travel with the destination. This campaign not only presented the offer to the traveller, but also allowed them to book in real time with the advantage of a one-year validity to be able to take the service.

We managed to integrate more than 500 tourism products nationwide and generate more than 1,400 packages sold via the platform.

Do you consider that the country's industry in general, and in particular, the members of other sectors other than tourism integrated in Fenalco, are aware of the importance of tourism for the development of the territories?

Of course they are. The arrival of national or foreign visitors to tourist destinations entails a development per se, as these tourists consume goods and services that are not directly accounted for by the tourism sector in the national accounts, but which is highly relevant. Industries and businesses are very clear about this situation, so that they include in their financial analyses and projections the potential arrival of tourists to the territories in order to make business decisions.

It should also be borne in mind that for regions that do not have industrial potential or very advanced technological development, tourism is their greatest bet for sustainability and growth. For this reason, it is a priority to support the tourism business sector in these areas so that the cascade effect brings social and economic benefits for local populations.

Do Colombians in general consider tourism to be important for the country's development?

The ordinary citizen, as a tourist, recognises that tourism generates development. You go on a trip to any tourist destination in the country and you find an important commercial movement, from the food supply to the artistic and cultural industry, as well as transport and other related tourist services.

Moreover, we are talking about a sector that generates close to one million direct jobs in the country and 3.5% of GDP in 2021. All this is perceived by citizens when they travel, due to our culture of going on frequent trips throughout the country, as our diversity in the regions allows a whole range of possibilities and tourist offers so that Colombians can choose what best suits their budget and preferences.

You are a man of great international experience, what do you think will be the evolution of the international tourism industry in the coming years?

In the coming years, the evolution of the tourism industry will be around experiential tourism based on user knowledge, linking this customer knowledge provided by different algorithms to the tourism offer of the regions. Places and experiences based on anticipating what the end consumer expects. Digital experiences of hybrid tourism, for example, in the world of the metaverse; in general, it is about the integration of technology into the areas addressed by tourism, such as cultural, experiential, gastronomic, etc. I believe that the tools to reach this goal are provided by the fourth industrial revolution.

Mr. Cabal, tell us a secret, have you considered making the leap to international tourism management?

From my current position as president of FENALCO, I have promoted actions to promote the inclusion of Colombia as a destination with high tourism potential.

I believe that, in a globalised world, not considering this leap is to become obsolete. Currently, our association is managing exploratory and trade missions to Venezuela, within the framework of the reactivation of diplomatic and trade relations with the neighbouring country. And one of our strategic axes to promote with the neighbouring country is tourism.

Finally, Mr. Cabal, as a Colombian, do you have a tip for visiting Colombia that is outside the usual offer we can find?

Our country is of course well known for traditional destinations such as Bogotá, Medellín and Cartagena, but there is another Colombia to discover, among which I would like to highlight destinations such as Tumaco, Caño Cristales and the Amazon. What is really special about our country is the great variety it offers, from the desire to know the biodiversity of the Amazon, to one of the three cathedrals built in salt in the world in Zipaquirá, or even historical tourism, which now with our reactivation with Venezuela is proposed to establish "the route of the liberator", a route that seeks to integrate the key passages of Simon Bolivar in his campaign for our continent.

Dear Mr Cabal, thank you for your experienced answers, and please do not go too far from international management.

The authors are responsible for the choice and presentation of the facts contained in this document and for the opinions expressed therein, which are not necessarily those of Tourism and Society Think Tank and do not commit the Organization, and should not be attributed to TSTT or its members.

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