The National Hotel & Restaurant Association says that the appreciation of the peso and the increase in taxes are the main threats for the well-being of the tourism industry. They warn that if the present trend continues, there could be a contraction of the sector and its capacity to generate hard currency. They criticized the government monetary policy to artificially bolster the purchasing power of the peso affects the tourism industry activity that makes up 20% of domestic consumption, as reported in the Listin Diario.
Asonahores points to the recent Technical Ministry of the Presidency (STP) study that indicated that the peso is artificially overvalued by 26.5%. Asonahores says that this acts like a tax on tourism receipts, affecting the sector?s profitability.
The STO study indicated that while revenues in pesos have declined 40% due to the appreciation of the peso, internal prices have only dropped 1%, and in no way compensate the appreciation of the peso.
While between August and December 2004, the peso appreciated 32%, the price level only dropped 2.4%, according to STP technicians. STP highlights that local prices have not dropped because of the constantly increase price of fuel, the increase in wages and the new taxes.