Ecuador News

Strong dollar hurts tourism but poor planning, lack of promotion also contribute; Cuenca is a case in point

Why is Ecuador’s tourism industry languishing while neighboring Peru and Colombia attract growing numbers of local and international travelers?

Government tourism promotion is lacking, some say.

The Quito-based Provincial Chambers of Tourism (Fenacaptur) has released the results of a study that place much of the blame on the exceptionally strong U.S. dollar but also show that tour agencies, hotels and restaurants charge too much. The study also faults the government for failing to promote the country at international tourism fairs.

Among specific findings is that 5-Star hotels in Quito charge almost double those in Bogota, Colombia; that tours organized by registered travel agencies cost 60% more in Ecuador than in Colombia and 25% more than in Costa Rica; and that the price of a meal in a good restaurant is 40% higher in Ecuador than in Peru. In fact, the average price of a tour in Ecuador ranks second only to one in Chile in all of Latin America, and the average cost of a meal in Quito ranks third, only behind Buenos Aires and Lima.

Poor planning has hurt tourism in Cuenca.

Holbach Muñeton, president of Fenacaptur, also blames the government is doing a poor job promoting Ecuador. “In 2015, it spent almost $4 million to promote the country at the U.S. Super Bowl football game but it only attended eight international tourism fairs. Last year was even worse and it only attended three. We should be attending at least 50 a year, like Costa Rica and Peru do.”

The study found that in-country air travel was much more expensive in Ecuador than in other Latin American countries. “We are not competitive in this market either,” Muñeton says, blaming the 2014 elimination of the jet fuel subsidy.

According to some tourism experts, however, Ecuador businesses that depend on tourist dollars mostly have themselves to blame for the slump.

“You can only blame the strong dollar to a certain extent,” says Fidel Fajardo, a tourism professor at the University of Guayaquil. “Yes, the dollar has gained 25% and 12% against the Colombian and Peruvian currencies since 2013 but this does not justify the price differentials we are seeing on such services as lodging, food and travel. Tourism businesses need to get realistic and make adjustments to their pricing if they want to get back in the game.”

Fajardo says that poor planning and research by tourist-related businesses is also a major factor for poor growth. “The industry needs to become more sophisticated and more saavy,” he says. He points to Cuenca as a case in point.

“International tourism boomed in Cuenca from 2005 to 2013,” he says. “It was growing 20% year but by 2012 and 2013, the strong dollar was beginning to take a toll and the smart tour agencies and hotel owners realized that the rate of expansion was not sustainable. The problem was that many investors were not so smart and were not watching the trends.”

According to Fajardo, there was a building frenzy of new hotels and restaurants from 2011 to 2014 and the resulting over-capacity is now hurting the city’s entire tourism sector.

“Today in Cuenca, you have a 30% occupancy rate in the hotels and hostals because of poor planning and you have dozens of empty restaurants,” he says. “The local hotel organization is begging the city government for help, blaming Airbnb owners for their problems instead of bad decisions made by its members.”

Fajardo agrees with Fenacaptur that the federal government should do more to promote Ecuador at international fairs. “The national tourism ministry has fallen down on the job, although much of the reduction in promotion is because of budget cuts.”

  • Frank Penny

    Too bad. I hate to see local businesses struggling. Last year, hotel volume dropped 20%; it seems even worse this year, according to 3 friends of mine who own hotels here.

  • William Bricking

    I lived in Panama for 5 years, and now Manta for a year and a half. I had friends visit me in Panama quit often. But the cost to fly here is almost double and a lot harder to get to Manta. ( I like Manta much better )

  • Greg

    Another reason is the lousy air service. There are very few flights and sometimes even those are cancelled.When you reach Quito or Guayaquil you can have a 12-18 hour wait for a connecting flight so you either have to rent a hotel room or spend a day at the airport.Add this to higher prices and it’s no surprise. I am moving to Quito for this very reason.No one will visit me here because it’s just to complicated to get here. Much to my surprise property is also cheaper in Quito than Cuenca by substantial amounts

    • Paul Pedersen

      When you fly from North America to Europe, you usually arrive in the morning and have lots of choices for connecting flights. By contrast, it seems all flights from North America to Quito arrive 10 or 11 PM when there are no onward flights available. As Greg has said, you have to take a hotel for the night and then start again the next day. Similarly, outbound flights seem to launch at midnight or later. Are these times mandated by the Quito airport or are the airlines being less than user-friendly?

    • Karen Lynn Kennedy

      When you arrive in Guayaquil, there are many travel options to use to get to Cuenca… private van services run every half hour from Guayaquil to Cuenca, and vice versa, and you can also hire private drivers.( I do it every time I travel…been here 30 yrs). Takes 3 hours going thru the Molleturo/ Cajas route. If you travel by day, the views are amazing. Quito is another story, being considerably farther away. But I agree, the flight service is lousy and expensive, and very unreliable now.

      • lorenzo

        We always fly into Guayaquil, arriving late at night. After traveling all day, we’re ready for a comfortable bed at the hotel. The next day after a shower and breakfast, we’re ready for the final leg of our journey to Cuenca, just a regular bus ride over the scenic Cajas.

        • sueb4bs

          Yes, I also seek the simple and sensible…

      • sueb4bs

        Ecuador IS indeed a developing country. After your 30 years here, you probably have figured that out. Little is perfect and much is imperfect or not at all what some of us fatcats from No Am or Europe are used to — very bad air services and getting worse each year in the U.S> I hasten to add.

    • sueb4bs

      I lived in Cuenca for 2.5 yrs and am now back in Quito since 1 May.
      Couple of points to consider : I live here #1 because I love this city and it is my home in this country. #2 Costs are considerably higher than January 2015 when I left and moved to Cuenca to check it out. Property prices are not cheap – if you think that you are not looking carefully. There are many more options, the city is now much over-built and there are zillions of empty apts. They will go higher = Ecuador is a developing country and prices go up everywhere in the world. IMO, you tend to NOTICE it more in a developing country… Transport is always an issue in every country. (Try traveling in the U.S. – yuck) Do you take the bus back and forth to Cuenca? There is no reason to rush for many of us & busses run all the time.
      Hey Greg, welcome to Quito, slow down and take it easy — you will find more cultural offerings,wonderful new and old friends to broaden horizons. lots to do, join and a bigger perspective on the world than Cuenca absolutely. Same nice Ecuadorians, bigger city, that’s all.

  • Dogoslave

    EC, and especially Cuenca, drank too much of their own IL kool-aid for far too long. No regular air service, a 4 hour drive from GYE and then get hammered with prices that just don’t equate to good value. People need to stick their head out of the bubble and keep better tabs on the competition.

  • LadyMoon

    Agree about the difficulty in getting to Cuenca being a real issue. I also question whether there is any planning (market research, etc.) when folks open a restaurant. We’ve all seen it countless times…work starts, furniture bought, a sign thrown up (sometimes), the place sits empty and finally closes.

    • guest

      LadyMoon, I agree 100%. Just went to a new hamburger place and paid a heck of a lot for…. I wanted to say to the owner, “baby this ain’t California.” I found absolutely no value in eating there. I would guess they will be closed soon.

    • sueb4bs

      I was in the cafe /bar business with a partner several years ago for several years in the U.S. in a high-end resort area. Restaurant business, food and/or liquor, drunks, waste and quality control, high capitalization, on and on and on it goes. This is a very tough business from many standpoints. There are TOO MANY places opening here in Quito, also — they open and within a year, they are done and closed. Probably Guayaquil too. In my two years plus in Cuenca, I saw many people thinking it is a lark to have a place you can invite your friends to join you, etc With no experience they cannot sustain the business, period and close. Tremendous number of hours, hours of work, worry about hiring people,IESS payments, holidays, etc etc etc, no family life competing with too many others, I think the article here is right on and Ecuador better hunker down and smell the coffee, reduce prices some and get real. Being “a boutique place” simply does not cut it.

    • Karen Lynn Kennedy

      Food quality also has something to do with this problem…some places are just too expensive and at the same time, mediocre to just plain bad food.

  • Andrew William Bridge

    Frankly, some of the issues folks are pointing out such as difficulty of getting to and above average prices at good restaurants are very appealing to many new immigrants. At least that is how I feel. There is a simplicity that is very attractive overall in Ecuador. With a delicate balance between promoting tourism and still being quaint certainly does keep the masses from polluting the serenity overall.

    • guest

      Andrew, please elaborate more. I am missing a bit of what you are saying. I think I agree with you but could you give some examples even though this article is about tourism and not immigrants. The very competitive nature of tourism is being examined and the search is on for reasons why Ecuador is failing at this endeavor.

  • guest

    I will try to hold back but the truth is the government is taxing the fun out of its citizens. Have you ever, other than Cuba, seen a country with more restrictive car ownership costs than here in Cuenca. It is completely structured for new car sales and bank loans.
    It is not a free market by any standard. Importation costs of everything is outrageous due to the taxes.
    LAN used to provide decent services for the $ but now they are off the charts. When a person is considering a vacation the very first thing they look at is transportation cost. If it is high they look for alternatives. Bam! Ecuador looses the game.
    The place is boring and an air of “how much money can I make on this guy” prevails. When you rent a hotel room with one bed it might cost $30 but if your wife is with you it jumps or doubles in cost. Wanna explain that? I was recently in Guayaquil and the double the room cost was being applied due to my wife being with me so I just negotiated a little harder and got two separate rooms for the same cost just to prove a point to the owners of the hotel. We ran the AC in both at max setting, used the heck out of each room but the people just didn’t get it! Welcome to Ecuador!
    In country transportation. This is a real serious problem that needs addressing TODAY! I read somewhere recently that Ecuador has lost over 1000 passengers so far this year due to bus accidents due to aggressive bus drivers, drunk bus drivers, bus equipment failures, and general lack of safety. This must stop today!
    Tourists read about the murders and bus robberies all the time. Ok, not that many but one is too many! This has to stop!
    The people of Ecuador are wonderful, the government is greedy, and they are not competitive on an international scale.
    First thing I would change is pass a law requiring restaurants provide a decent napkin.

    • Karen Lynn Kennedy

      AMEN to all that you said…I’ve been here 30 yrs and still waiting for the aforementioned things to reach a decent standard, tho’ when I first arrived things were much worse, not to mention that at nightfall, Cuenca “rolled up it sidewalks” and became a ghost-town after 7pm!!!

  • tim murphy

    i sure can relate! been living in cuenca now for over 5 years and we sure have seen restaurant prices skyrocket! we no longer frequent what were our favorite restaurants because the prices are more like us restaurants than cuenca restaurants! spent a month in medellin last november and restaurant prices were well below prices in restaurants here in cuenca ( and the food was far better quality than cuenca restaurants ) . we now rarely eat out at any restaurants in cuenca. prices are too steep now here, especially for the quality of food most restaurants put out there. and not at all surprised by the sheer number of restaurant failures in cuenca; poor/inconsistent food, poor and inconsistent service and high prices; why go out in cuenca if one can cook?

    • Ellen Andrews

      I had an excellent pasta dinner and a glass of decent wine for less than $10 last night in Cuenca. I had the same meal three weeks ago in Miami for $24 or $25. I realize you would find exceptions to my experience in both Ecuador and the U.S. but in four years of traveling back and forth, I find that on average, eating out costs abut twice in the U.S. what it does in Cuenca.

      • guest

        This is an exception to rule Ellen. I usually pay $8 per glass for “decent” wine, less for garbage, and an equal amount for dinner. Add another fiver for tip and we are at USA prices, most everywhere there is a decent meal.

        • Ray Reynolds

          $17 for a plate of lasagña in Atlanta when I was up to see the grandkids in June. $4 for a better plate of lasagña last week at Fabiano’s with a $4 glass of wine. Seek and ye shall find.

          • guest

            Ray,
            I agree, Fabiano’s is an exception to the rule. Aren’t they great? I eat there at least once per week. Their pizza prices are the same as they were five years ago or more.

            • Greg

              Being 100% Italian heritage I’m fussy about Italian food.I discovered Fabiano’s shortly after I first moved here.I was told about the pizza’s but their Italian food is top notch also.The prices are also very reasonable.I met the owner and he told me he had a similar business in the US for many years before he moved back to Ecuador.It’s the one place I’m really going to miss when I move to Quito.

          • Karen Lynn Kennedy

            Fabiano’s is the exception…the owners lived in the US, and all the family is fluent in US methods of running a successful business…AND the best pizza in town.

      • sueb4bs

        RE: ” I find that…” and your statement is at a minimum… I prefer mostly to cook and eat well at home

  • tim murphy

    and damn, don’t even get me started on travel to and from cities in ecudaor! that is a real joke! colombia has great airline services to and from cities in colombia. if colombia had a better visa system, we’d be living in medellin right now and not in cuenca! we do like and enjoy cuenca for many things; travel and restaurants don’t make the list of things we enjoy about living here

    • Kaye Sturgis

      Hmmm . . . second time I clicked on “like” when I didn’t mean to do so. Got to stop that. We’ve had three very specific sets of guests, who planned to to visit us here in Cuenca, and when they looked into cost and timing to purchase their tickets, changed their minds. I do envision more peeps coming if it were easier to travel here, and wish it were so, but for those of us who did arrive, well, I love Cuenca, it’s people, and the ecstasy of having a place like this in the world to live, was worth the agony to get here. Maybe that’s just what it takes.

  • mjw9

    Living in a beach town below Manta, I can attest to the fact that restaurants and other tourist accommodations have gotten way too high in many areas. I recently saw an advertisement (sale?) for a meal at a restaurant in Cuenca that was touted at $30 per person + tax. With a decent tip that amounts to around $40 per person. Many, Many tourists and visitors look for inexpensive travel and overpriced hotels and restaurants don’t fit into that model. Really? $40 per person? One can eat superb meals in many Latin American countries and other EC regions for MUCH, MUCH less. This is comparable to pricing in many US and other places that are much cheaper and easier to get to for most tourists. Rental car prices are also ridiculously high at $35+ per day for an often very sub-par very used old car. Nice vehicles can be rented in many other places for at least 30% less and be a more reliable comfortable vehicle. The exorbitant airfares are also a problem. Flights from USA and Canada to EC are about DOUBLE those from USA/CAN to Riviera Maya and often even to Europe or Hawaii. Add it all up and it equates to a cost that is not attractive in the world market for travel.
    I would not have considered moving to EC if it was not for the Pensionado discount for airline travel because I don’t intend to be trapped in a place where my ability to travel is limited because of overpricing. Tourists and other visitors/explorers don’t get any discounts like that. Tourism is a VERY good source of revenues for a country and its businesses as the tourism industry employs many persons and the money stays in the country while the local economy is not responsible for education, healthcare, etc for those visiting…but a few greedy industries will kill the golden goose. The low cost of living in EC is low, and is one of its big advantages over other places, but gouging tourists (and expats) for a quick buck is a poor long-term strategy.

    • Ricki

      Because of the huge increase in health insurance, not included in our budget, we have to choose to cut going out by 75%. We are on fixed income. Coming up with an additional $330 a month is extortion. Many we know are even harder hit Very sad to spend your retirement years this way.

      • guest

        Rickity, I agree with you. Insurance is a private option that should not be being dictated by the government, period! This is what is screwing up health care all over the world.

        • mjw9

          If you think government screws up the healthcare market, just try unrestrained capitalism like in the USA. Highest cost per capita in the industrialized world BY FAR and down around 35th in the world for outcomes. I laugh at all of you complaining about monthly health insurance costs of $260. That is a bargain and you should be grateful, not spiteful

          • sueb4bs

            Precisamente, mjw9!!

          • guest

            mjw9, why is the insurance industry involved in controlling health care? Other than making outrageous profits for their investors, who do they insure? The individual or the provider? Insurance companies drive up the cost to the end user as do lobbyists. Insurance companies cause economic disasters to many, especially when they deny claims in an unrestrained manner. They do this often! Insurance companies buy the politicians and set the rates that cannot fail. If it seems a little costly, they screw the ones they are supposed to be protecting.
            How many insurance companies do you know of here in Ecuador that pay, on time, the full amount, and stick around for any time at all without shutting the doors and heading to Miami with the profits?
            Insurance companies are simply carpet baggers and now they are trying to get the government to force us to do business with them.

            • mjw9

              Guest… You’ll get no argument from me regarding a desire to get middlemen (private insurance companies) out of healthcare. My comment had nothing to do with insurance companies, it had to do with allowing unrestrained greed to control access to healthcare for human beings, especially when such humans and their families may be at their most vulnerable. In the USA Medicare and the VA system are significantly more efficient than private healthcare insurers and would be even MUCH MORE efficient and effective if greedy politicians in the pockets of lobbyists would allow them to negotiate for drug prices, etc.
              While Ecuador’s systems are far from perfect, they COULD be much worse if they didn’t have government healthcare controls and options. In the big picture healthcare in EC is quite reasonably priced and of reasonable quality and…..available to all.

      • sueb4bs

        Maybe go back to the great old U.S> or Europe wherever you came from?. Most of us have a budget yet you sound like you are all alone with this issue. C’mon…

    • sueb4bs

      My dumb, simple thought is, DON”T PAY THE HIGH PRICES, PERIOD.. If people consistently did that , businesses would “get it” Wow –,now that’s a breakthrough!

  • markshlitz

    A friend and I were at a restaurant around 3-weeks ago. They charged $13 for a hamburger, a couple of fries and calmly explained how cheap is was for the price. Never went back.

    • Ricki

      This is when you share a meal, but even then that price is outrageously over priced.

    • sueb4bs

      Tell THEM what you think as well as NOT GOING BACK EVER. THey will not be in business long.

  • Kimberly Curls

    Fly often to MIA and the costs from GYE to MIA unaffordable most of the time. Heck, you can fly all the way to NY for almost the same price as MIA. UIO not better because you have to GET THERE and probably spend the night. All additional $$$. As stated in other posts….transportation is the first item in planning a trip. Need some more competition GYE to MIA.

  • dan p

    In Colombia tourists do not pay hotel tax of 19% so it makes accommodations
    much more affordable. In Ecuador the hotel tax is 22%. Greed of the government is destroying tourism.

  • Rodney

    I agree, there are two main reasons I have not returned. 1.Airfares have doubled in price.
    2.Lousy flight schedules. Need international arrivals / departures that allow connections to Cuenca without added expense of taxis and hotel for late night arrival with early morning departures.
    Love Ecuador but getting very pricey to visit. I’m in Costa Rica now because it was the easier and less expensive location to travel to for me.

  • Beth

    Once Ecuador’s Travel Insurance regulation kicks it will be worse.

  • StillWatching

    Go look up metaphorical hyperbole and get back to me. To each his own. I prefer my own bed to any option you can offer me in hot, sweaty Guayaquil.

    • lorenzo

      Just like you’ve been guessing, I’ll guess that you haven’t stayed in Guayaquil for a long time. There have been major improvements in many areas of the city, both cosmetic and cultural. The Malecon and surrounding area is actually safe to walk around even at night (when it’s cool). The hotels and many other establishments are air-conditioned these days. Honest. I’m not exaggerating.
      It’s easy to stay in your own bed every night as long as you don’t travel.

      • StillWatching

        You guessed incorrectly. By necessity, I’ve had to spend quite a bit of time in Guayaquil and I stand by my opinion of the place. God put Guayaquil on earth to show men what would become of them after death if they didn’t comport themselves well when living on earth; It is hell.

        I readily acknowledge the beauty of the Malecon and the other cosmetic changes you allude to. The entire city has vastly improved over the last 5 years and compared to the way it was 20 years ago, it is a paradise. Yes, many places are air conditioned these days and if your idea of “okay” is running from one air conditioned place to another while dripping sweat, then I’ll leave that to you.

        Your comment about staying in your own bed and not traveling is silly because it is a deflection of my original statement that I prefer my bed to some hotel room in Guayaquil. I’d wager a large sum of money that I travel far more than you do based on the limited knowledge I have of your domestic (farm) requirements and complete knowledge of my own travel schedule.

        • lorenzo

          Guayaquil is a main jumping off spot to visit the Galapagos, maybe the biggest tourist attraction in all of Ecuador. Comparing Guayaquil to death and hell won’t help Ecuador’s languishing tourism industry. Don’t worry. Folks will realize it’s just one man’s opinion.
          It’s also funny to note how this conversation started by discussing preferred methods of arriving in Cuenca from international destinations. You turned it into a competition on who’s traveled the most. You’re a hoot!

          • StillWatching

            Discussions morph. If you don’t like it, don’t participate.