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Hotel industry's booming in Colombia: More luxury inns planned
The Miami Herald / March 20, 1996

By Larry Luxner

MEDELLIN, Colombia -- Despite its lush tropical flowers, breathtaking mountain views and palm-fringed Caribbean beaches, Colombia isn't exactly a tourist's paradise. Visitors are urged never to hail taxis off the street and multinational executives routinely carry kidnap insurance in this Andean nation, where an astonishing 31,000 of the country's 35 million inhabitants were murdered last year -- making Colombia one of the most violent nations on Earth.

Making matters worse, Bogota's Eldorado International Airport is one of only three in the world declared unsecure by the Federal Aviation Administration (the other two were in Nigeria and the Philippines).

On Mar. 1, Colombia received the ultimate blow to its prestige, when the United States -- concluding that President Ernesto Samper hadn't done enough to fight the drug trade -- decertified Colombia, thereby disqualifying it from direct U.S. economic assistance and lumping it together with such pariah nations as Afghanistan, Iran and Libya. Even the country's subsequent assassination of Cali drug lord Jose Santacruz Londono, less than a mile from the Hotel Inter-Continental in Medellin, couldn't reverse Washington's decision.

Yet even with all the chaos, Colombia's hotel boom -- fed by a healthy economy and billions of dollars in laundered drug money -- continues with no end in sight. Over the last few months, three large hotel chains have all announced plans to build luxury properties throughout Colombia.

"In spite of everything, people are coming," says Jorge Valencia Caro, an advisor to the Bogota Hotel Association. He estimates that between 1990 and 1995, some 2,700 hotel rooms were added in Bogota -- a metropolis of seven million people. "There's been a surge in international franchises here. This gives a lot of confidence to foreigners, especially Americans."

In 1995, according to the 1,600-member National Association of Travel Agents, 1.4 million people visited Colombia, of which 500,000 came for business reasons, 200,000 were Colombians living overseas and 700,000 came as conference attendees. Together, they generated $700 million in foreign exchange.

"There's a lot of money in the economy," says Valencia. "This has generated lots of construction and jobs."

At the end of 1995, he said, there were 46,123 hotel rooms in 1,321 properties throughout Colombia. Bogota had 6,839 rooms in all classes, of which 1,903 were in five-star hotels and 1,608 in four-star hotels. The average occupancy rate was 56%, and the average cost of one night in a luxury hotel in Bogota was $144 -- though some properties such as the Casa Medina ($225) and the Charleston ($235) were considerably pricier.

The largest is still Bogota's downtown Hotel Inter-Continental Tequendama, which was inaugurated in 1953, has 630 rooms and is considered Colombia's "flagship" hotel. The Inter-Continental also has properties in Medellin and Rio Negro, and is building a hotel in Cartagena to open in early 1997.

José Manuel Lovaton, general manager of the 320-room Inter-Continental in Medellin, said tahat in 1992, "the city's bad image was justified, but not anymore."

"The year drug baron Pablo Escobar was shot, we had a 6% rise in our occupancy rate," he said in an interview here. "The greatest news we all received was the downfall of the Cali cartel. All of them are behind bars. The image of insecurity is in the past."

According to Valencia, the administration of former president Cesar Gaviria spent $500,000 taking out full-page ads in major U.S. newspapers telling Americans it was safe to visit Colombia.

While Medellin -- or Colombia in general -- can hardly be considered a model of security, investments in new hotels are continuing at a record pace.

ITT Sheraton and Bogota-based Prointel Ltd. have agreed to develop eight mid-priced Four Points hotels throughout the country by 1999. The first to open will be a conversion of Bogota's 93-room Hotel Regency, followed by a 123-room hotel in Medellin set to open this summer. Later, a 120-room resort will be inaugurated in Santa Marta, on the Caribbean coast. In 1997, two more sites will open: a 375-room property in downtown Bogota costing $85 million, and a 133-room hotel in Cali.

The remaining hotels -- in Cartagena, Barranquilla and Bucaramanga -- should open in 1998 and 1999.

Prointel President Jorge Londono says he's confident that "both our existing hotels that are converting to Four Points Hotels, as well as our properties under development, will benefit tremendously from the ITT Sheraton association and the brand positioning of Four Points Hotels," which offers meeting space and catering facilities; on-premise, three-meal restaurant; business services; in-room dining; laundry services, swimming pool, fitness facility and in-room desk and working space.

Separately, Spain's Grupo Sol Melia will add six Colombian properties this year to the two it already has: the 198-room Melia Pereira, located in that city's business district, and the 53-room Melia Santafe in Bogota's upscale Santa Barbara neighborhood.

"The diversity of Colombia's destinations and traveling public are of great interest to us," said Evagrio Sanchez, executive vice-president of the chain's Americas division. Slated for opening in 1996 are the 192-room Sol Arahuco in Rodadero, Santa Marta; the 219-room Sol Caribe Campo on the island of San Andres, an all-inclusive property; and the 230-room Sol Caribe Centro, featuring the largest disco on San Andrés. Opening next fall are the 90-room Melia Cali and the Sol Providencia, located on a coral island known for its ecological diversity.

Late last year, Days Inns of America Inc. signed a master license agreement with Bogota hotelier Moises Carreno for the development of at least 1,000 hotel rooms in Colombia over the next five years. Under the agreement, Bogota's historic Hotel Nuevo Gaudaira was renamed the Days Inn Melgar. Carreno says he expects to open four additional three-star properties in Bogota, Cali, Medellin and Pasto by mid-1996.

Finally, Promus Hotel Corp. chose Bogota for its first Embassy Suites property in South America. The 98-room hotel, owned and operated by German Morales e Hijos Orga-nizacion Hotelera Ltda., is located on Calle 70, in the heart of Bogota's financial district.

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