Peru Bets on Tourism Law to Spur Jobs and Investment Amid Slow Growth

Peru’s government has introduced a new tourism law to help the country’s economy grow and create more jobs. The Ministry of Foreign Trade and Tourism says tourism made up 2.5% of Peru’s economy in 2023.

Officials want this to grow to 3.7% by 2026. They also expect tourism to support more than 1.6 million jobs by then, up from 1.2 million jobs in 2023. Tourism in Peru suffered during the pandemic.

In 2019, Peru had 4.4 million international tourists. By 2023, only 2.5 million tourists came. The government expects 3.5 million international tourists in 2024 and hopes to return to 4.4 million by the end of the year.

Tourism is important for many families in Peru. In 2023, people in Peru made 37.2 million trips inside the country, bringing in about $4.9 billion. This is still less than the 48.6 million trips made in 2019. Tourism businesses employ about 6.8% of all working people in Peru.

Many tourism businesses in Peru operate without registering with the government. This makes it hard for the government to collect taxes and for tourists to know which businesses are safe.

The new law wants to fix this by making at least 5,000 new businesses register by 2030. The government also wants to cut down on unregistered businesses in popular tourist spots by 30%.

The law gives tax breaks to hotels, restaurants, and other tourism businesses. For example, these businesses will pay a lower value-added tax (VAT) until 2027. This should help them save money and invest more in their services.

The government is also working to attract more private investment. It is building new infrastructure, such as a cable car to the Choquequirao ruins and a new terminal at Lima’s airport.

These projects should make it easier for tourists to visit different parts of the country. Peru’s economy faces challenges. Growth is expected to slow to 2.8% in 2025 and 2.6% in 2026, according to the OECD.

The government hopes that a stronger tourism sector will help offset this slowdown. This new law is a big step for Peru. The government wants to make tourism safer, more formal, and more profitable for everyone involved.

The success of this plan will depend on how well these changes are put into practice and whether businesses and travelers respond as hoped.