Uruguay’s tourism sector is a vital economic pillar, contributing 5.6% to GDP and employing over 104,000 people formally. Despite its significant impact, the sector faces profitability issues that threaten its sustainability. Real tourism revenues have declined by 24% in the past decade while operating costs have risen by 8%, creating concerns about its future viability.
The situation calls for urgent action from both the government and private sectors to reverse this negative trend. Despite challenges, the tourism sector holds great growth potential. Increasing activity levels from 2017 could boost GDP by 2.8%, create 19,000 additional jobs, and contribute $220 million more in taxes.
To revitalize the sector, key recommendations include implementing a permanent 0% VAT rate for non-resident tourists and increasing investment in international promotion and marketing. Attracting private sector investments through fiscal incentives and a favorable regulatory framework is also crucial for sustainable growth.
A National Strategic Plan that coordinates public and private efforts is essential to optimize available resources and maximize economic benefits. With a unified commitment, Uruguay can reposition itself as a competitive tourism destination and drive economic development effectively.
